Here is the lowdown on energy. (December 07, 2015)
XOIL.X XLE XOIL.X XLE OIH XOP CVX XOM XOIL.X
I want to look at energy today, oil. This ( XOIL-X ) is finding a bottom. It’s really, really trying hard to find a bottom. I remember way, way, way back in the day, back here, it was actually above $80.00. Dennis Gartman was talking about oil being $10.00 a barrel. Now he was making that forecast for other reasons, but the bottom line is, this guy could turn out to be right on this. It may take a while, but you just don’t want to be there. Don’t be trying to “bottom feed,” “bottom fish,” whatever. Don’t try to pick the bottom in oil; it’s not going to work out.
You look at these energy stocks ( NYSEARCA:XLE ); you could say, “Oh, well this is an oversold bounce.” Sure it is. Where’s the bounce? It’s just the oversold. Well this may be worth a look down here, $60.00. Well, sure, I guess; but look at these, keep an eye on these. Now watch what happens ( XOIL-X ), this was a much higher low than this ( NYSEARCA:XLE ). But we didn’t get much of a rally here. I was looking for more. But one thing, when I look for something and I don’t see it, I move on. I don’t assume that it’s there.
This is not there ( ( XOIL-X ) ). You don’t want to be here. Here ( NYSEARCA:OIH ), the same thing; Oil Services Exploration and Production ( NYSEARCA:XOP ). I don’t want to explore or produce here, I just want to get out. Oversold bounce? Sure, perhaps at 32.00. But is this your buying opportunity? I don’t think so. Look at this massive liquidation. This is not Manny, Moe, and Jack, or Jethro and Billy Bob, unloading. This is some pretty significant distribution, it’s institutional distribution. Don’t be the one to take the other side of their trade, that’s not going to work out. Chevron ( NYSE:CVX ), drifting back below the 50-day moving average; that’s not going to work.
Finally, Exxon Mobil ( NYSE:XOM ), that’s not going to work either. What a difference a week makes. This back here, look, 3.7 percent dividend. The stock is at what price? Basically $82.00. Right? So this is sure looking bullish to me. Well now, from 82.00 down to 76.00, it’s 6.21 percent down. Suddenly that 3.7 percent dividend yield that was so enticing the other day, last week, is not so enticing now. So the bottom line is, we saw a nice move in energy. It sure looked like things were going to move higher ( XOIL-X ). They didn’t. They’re not. I don’t get to make the rules, I just get to follow them. But what I’m suggesting to you is, this is an area that you DON’T want to be in right now. Just stay away. Frankly there aren’t a lot of places to hide.
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