- There is very little short term buying power remaining
- Oil between $55-$60 is the new no man's land for the commodity
- The stock market expects oil to trade back above $60 quickly
Wikinvest Wire
Thursday, July 14, 2005
Oil Smackdown
Oil is down a couple of bucks but stocks haven't moved up in kind. There are many ways to take this;
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5 comments:
Any sense in banking on alternative energy, like WilderHill Clean Energy Index (PBW) or related stocks like Evergreen Solar (ESLR), for example? Part of me thinks oil is plentiful and technology allows us to find it increasingly more easily and extract it more efficiently...
china rptd declining crude import #s yesterday for first time in like five years and crude stocks contiue to build. if this is slowing of chinese economy - global oil demand will slow tremendouly - nyt had good recap of the article. markets didnt digest it as quickly
"banking" on alternative energy? Probably not for a while. Having some exposure does have merit. The concept of an ETF makes sense for most folks becuase this field has been and will be feast or famine. Pick wrong and you get left behind. This comment is more for trying to capture the effect. Someone who really knows the industry s/b able to fare better picking stocks. I know PBW is the only ETF, but I have not analyzed it to make a specific opinion on that fund. Above I am talking about the idea of an ETF not recommending PBW.
To the second point, I agree energy demand will always be subject to short term swings. I am not inclined to trade around somethng like that with client money. The long term trend, I believe is for increased demand from several emerging countries, volatlity notwithstanding, and that is something I will invest client money around.
Oil up...economic drag...bond conundrum...measured pace Fed...stocks rising.
Oil down...economic stimulus...bond conundrum unwound...aggressive Fed...stocks decline.
stockman may be right. I think either argument could be made.
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