I have been honing my technical analysis skills and the chart for oil, as depicted here, looks to be headed lower.This is a humor attempt.
While I would probably not be the one to call a top in oil I have repeatedly tried to convey the oil could go down at any time and that oil stocks would look ugly when it happened.
Recently I opined that oil would be unlikely to spend any serious time below $65, I may have the chance to be proven wrong on this.
The hurricane season is turning out to be less of a worry than originally feared, which is not much of a shock. Israel has faded some as an immediate worry and supply is perceived to be healthy for now.
This just in; oil is volatile. I have been clear in that my interest in oil is more of a big, long term, gradual increase in demand coming from China, India and others. Fair enough if you do not buy into my logic here but for folks that do own oil stocks for this reason, declines like this will go with the territory.
This does not mean you should be static either. I was very public as to the timing of reducing oil exposure back in April. While it is too early to know now, if this decline turns into a panic (this would obviously be a matter of perception) it may be time to add a bit more.
4 comments:
I hope oil gets ugly from here. Oil like most things is hard to predict, but it certainly seems possible.
This would be a great counter balance to the housing woes.
you should run more basic charts first, none of this point and figure stuff.
That 4th penguin is clearly a DeMark violation of some sort.
I liked your picture. You may get a chuckle out of my Coast Guard drug bust pix taken Saturday. (www.investingfromtheright@blogspot.com). Oil is headed down, in my view. Four reasons:less geopolitcal tensions due to likely Democratic gains in November elections (some call it cut and run and I agree, but one may as well play the cards that are dealt; a slowing economy; more efficient rigs (with some super rigs coming on line to handle oil drilling that will be needed deep in the earth);and, OPEC opening up the spigots to the max, in spite of what they may say publicly. OPEC does not want to see alternative fuels gain more traction.
I bought into an energy mutual fund in 2003. I figured I would put enough in that the gains there would offset the pains at the pump.
There is an ancient investing theory that you should own enough utility stock that the dividends pay your utility bill. This is a variant of that idea and has worked out pretty well. The energy fund is in effect buying my gas.
I'll keep the energy fund even if gas prices go down a bit here.
Fred
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