.....and other hedge funds that are SHORT XOM......they would like to thank all of you bag holders. Just keep holding on as XOM goes to the low $60's and gives me a BIG gain on my September puts.
The hedge funds must LOVE bagholders like you guys. You never know when to sell. This puppy has low $60's written ALL OVER IT......from both the fundamental case, as well as the technical case.
See you I the low $60's when cash in my puts.....
OK....3 days ago it actually DID hit $90.00 on the nose...and then dropped back. This baby is heading SOUTH....along with the rest of the market as it CONTINUES its slide into the Sept/October bottom.
Oil prices will pull back....as China weakens. Apple will miss earnings (again) when it reports in July....but the stock has continued to drop as the market continues to absorb what that will mean. Apple is 15% of the NASDAQ100 and 8% of the entire NASDAQ market value. When it misses....it will pull all markets with it.
Hong Kong property prices continue to plunge.....and that is pulling the Shanghai index with it. That negative sentiment in Asia will pull US markets down with it.
Jobless claims in the US have rose the past 3 weeks....and I expect that to continue as the US continues to slow down as well. With world markets slowing down...it was BOUND to hit the US eventually. Now it is happening. This will lead to higher volatility and lower prices in the equity markets until we get to a bottom sometime between MID SEPTEMBER and EARLY OCTOBER of this year.
In addition...the Arctic ice sheet CONTINUES ITS RECORD SETTING LOW levels of ice. The Arctic ice sheet "bottoms" in mid September each year. This year.....it will likely end up between 20% and 40% BELOW the prior record set in 2012.
The drop in ice.....and the coming headlines on network news in June, July, and August.....will lead to an INTERMEDIATE TERM BOTTOM in oil stocks this September/early October. Oil stocks will bounce from there...and that bounce will likely be SIGNIFICANT.....lasting 12 - 18 months...and pushing XOM back up to the $90 - $100 mark......and THAT will be the end of the bounce....and the start of a LONG TERM DOWNTREND for all oil and gas companies.
Read this SHORT article...and you will understand why oil is doomed:
The oil company's aren't doomed because of global warming.....they are doomed because they soon won't be able to compete. Solar and wind will fuel our homes and businesses......and cheaper and cheaper electricity means electricity will power our cars.
"That’s the biggest weekly drop since August 2015. Nationwide crude inventories increased by 2.8 million barrels to 543.4 million, the most since 1929."
Think about that for a minute: Production dropped.....and yet, inventories went UP. THAT...is not a good sign. It means production needs to drop even more.
Short term: Headed down to $60ish......will likely bottom in late Septmeber to mid October (that 30 day periods).
Intermediate term: After bottoming in the $60ish range (give or take a few bucks....this will likely BOUNCE UP. This "bounce" may be SIGNIFICANT. I'm talking about a bounce UP to $90 - $100. I won't buy in...because they are MANY OTHER BETTER PLACES to put money. But this bounce could take 12 - 18 months or so.
Long Term: After that "bounce"....then the REAL DOWNTREND CONTINUES. And this one will ultimately be to zero unless XOM gets into another line of business (like alternative energy). This downturn could take a decade or more to play to the end. It will depend how significant the climate change events are over the next few years (next 3 years).
...as well as other oil and gas companies.
1) Saudi Arabia is selling part of their oil and gas company in an IPO next year. Why? Likely because they see the REAL possibility of them getting stuck with oil in the ground....and no where to go (over the next 10 years).
2) Arctic ice sheet is at a RECORD LOW for this time of the year....and likely headed for a new record low come September at the end of "melt season" in the Arctic. THIS...is a significant issue....and so far the melt has been record setting. This will only hasten the move away from fossil fuels. I'm a FISCAL CONSERVATIVE. Global warming is ABOUT SCIENCE....NOT POLITICAL IDEOLOGY.
3) Divestitures from oil and gas companies will CONTINUE....and this summer they will likely pick up. NOT GOOD for oil and gas companies.
By the way......ELECTRIC UTILITIES are also in trouble long term....so STAY AWAY FROM THEM. Same reasons as oil and gas companies. They are an OLD technology whose time will end in the coming years/decades.....and Wall Street knows that.
Sell your oil stocks NOW. If you want to buy them back when XOM get's to the low $60's...they buy them back THEN. Just realize....that the FUTURE BOUNCE from the $60's area....is ONLY A BOUNCE. And smart money will be selling into that bounce.. After that FUTURE BOUNCE is done.....so is XOM. It will be a LONG AND WINDING ROAD DOWN.....
They NOW realize that there time on this planet is limited. Yes....it will take DECADES to wean us off of oil....but it is NOW HAPPENING. And Wall Street realizes that. And Saudi Arabia realizes that.
It also doesn't help that the Arctic ice sheet is at a record low level for this time of year, and it is likely headed for a RECORD LOW MINIMUM come this September. By July.....this will be a major news story...so you heard it here first. Greenland will also likely get some more significant melting this year...and it is already off to a WARM start.
The future of the big oil and gas companies will NOT be as big oil and gas companies. They now know they will have to get out of the oil and gas business. Those that aren't TOO LEVERAGED will look to buy alternative energy companies. TOTAL already beat them to the punch about 4 years ago when Total bought Sun Power. The others will follow...and that is likely to pick up steam this summer and fall.
A) Commodities headed back down for a "retest" of their January/Feb breakout
B) Suncor and other oil companies weak....
C) XOM will see $60ish before it sees $90. This will take a while...I don't see $60ish happening BEFORE this coming September at the EARLIEST.
It's going to work VERY WELL for me. No more juice in XOM. See you in the low $60's...:) Take a look at the last 8 days of trading. Seven of those days have "bearish candles". This puppy is "out of gas" (so to speak....;)
I tried to tell you guys.... It isn't going to hit $90, BEFORE it hits $60 (or at least the LOW $60's).
Apple earnings cratered....that was step 1. Now....a weak GDP number will be step 2. And continued rising oil inventories will be step 3.
The good news is that it will hit $90 in the future.....but not before heading to $60ish. And after it hits $90 - $110 at some point over he next 18 months.....THAT will be oils "last hurrah." It will be all downhill after that.
You would have an attorney hold the money? Are you kidding.....why not just have a burglar hold the money.....or a politician......or a used car dealership. NONE OF THEM HAVE ETHICS.
I'll be back when XOM is in the low $60's (getting ready to go long). But for now.....the fat lady is getting ready to sing....and this puppy is heading SOUTH.