Oil up, stocks not so much
Oil up, stocks not so much
Dan, I was very surprised to see how few of your faves went up as much as oil did on Fri. One would think that the group in general would have done much better. Any idea why they may have underperformed?
Re: Oil up, stocks not so much
There are still very few committed buyers and I'm sure a lot of investors want to see Q4 results that start pouring out next week.
IMO the rally in oil prices on Friday was a "Short Covering Rally". Oil traders did not want to hold short positions over the weekend in fear that OPEC would announce a serious meeting on Monday before the markets open.
Oil traders ("speculators") drive the price of oil. They outnumber commercial traders by at least 20 to 1. On some days the ratio is more like 100 to 1. The steady rise in oil prices will come when the speculators think they have milked the downside as much as they can. At that point they will go long and you will see Goldman Sachs forecasting an oil shortage in the near future.
IMO the rally in oil prices on Friday was a "Short Covering Rally". Oil traders did not want to hold short positions over the weekend in fear that OPEC would announce a serious meeting on Monday before the markets open.
Oil traders ("speculators") drive the price of oil. They outnumber commercial traders by at least 20 to 1. On some days the ratio is more like 100 to 1. The steady rise in oil prices will come when the speculators think they have milked the downside as much as they can. At that point they will go long and you will see Goldman Sachs forecasting an oil shortage in the near future.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group