Morning Market Thoughts

by DAN Good morning. Looks like we’re opening at all time highs again today, with the futures up slightly. Some stocks I am watching today will be those related to oil, with may be moving higher after all. Apparently several OPEC members are pushing for a production freeze, which would push oil prices higher. In turn, the energy sector would be a big beneficiary, though you’d be paying more at the pump for gas. There’s always a trade off.

As you know, energy has been a sector to “watch”. It has been largely trending sideways after a multi-month run, and has been positively diverging from oil. Though oil prices have declined, many stocks in the energy sector have been essentially flat.

Take a look at Schlumberger (SLB), Williams Companies (WMB), and EOG Resources (EOG). EOG reported earnings on Friday. Revenue declined big time. But the company raised guidance for 2016 and caught some upgrades because it was reducing costs. The stock broke out and closed up 7%. It’s a bit too extended here and my bet is that you’ll be able to buy it at a more reasonable price in a few days. Let it settle in.

WMB and SLB look like they have some good potential. They are “coiling” in the charts — just poised to break out. But wait for it — spotting “potential” is not the same as a sure thing.

This market is extremely strong, and I’ve got to think that much of the strength is due to incessant helium being pumped into the markets by central banks, who can print as much money as they want. Doesn’t make me happy, but it’s important to put this in its proper perspective. If you are an aware investor, you can participate in what the market gives you and avoid being a blind follower of financial news. You put your attention to the trend of prices and focus on that. The other stuff is interesting. But honestly, I think I track this aspect of the markets enough to give you the high points. If you start getting into the dirty details of the market, you’ll be tempted to put your money under the mattress. Don’t do that. Just focus on stocks that are going from lower left to upper right. Stick with those and you’ll do just fine.

See you in the forum.

Dan

Market Update