Here’s a copy of the paid subscriber newsletter that went out on Tuesday, 8/17. I think you’ll find it interesting since oil is down another $3 since.
The Energy Word delivers these kinds of actionable market ALERTS every Tuesday and are only $25/month.
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How shall we spend our time, while we’re waiting for the Delta variant to make it’s way through the global economy and finally settle out some time – some time when? - maybe in the late Fall.
It’s then that the CDC sees the peak for the Delta variant coming – and when our oil opportunity will again materialize. It’s a dark view to take, I know – but it will be when the world is in it’s deepest worry about Covid again that the markets will likely show it’s best value to us.
For now, this is not a chart that I want to mess with:
We’ve not been wrong to back away from oil and oil stocks in the last few weeks. Oil has continued to lag as have the stocks. This chart is kind of screaming that the worst is far from over, too. It is a weekly candlestick of crude oil, with two of my most favorite indicators – the Bollinger bands overlay and 14-session RSI’s. The Bollinger’s look nastiest with the move started in July, where the up slope continued to ride against the top line of the band, then started to settle away from it. It looks worse when that move breaks the moving average line as it did in the last two weeks. Ditto with the RSI below it. A move near to 80 and then a quick drop below indicates strong downwards momentum is now in play, and I don’t think a mere 7 or 8 dollars will be the extent of it.
But while we’re waiting, I thought I’d reiterate our thesis – and keep everyone’s eye on the ball (the long-term one, that is).
I’m in the process of reorganizing the Energy Word through the rest of the Summer and one of the projects handed to me was a 1-minute video to introduce new subscribers to the idea of the Energy Word and the reason to at least follow or possibly subscribe to the service – and the video goes like this:
We live in fantasy world, not least when it comes to energy.
I look around my room right now – there’s an aluminum can holding my soda that couldn’t have been produced without the intense heat of fossil fuels. My computer keyboard and printer next to it are mostly plastic – all made from oil. My phone’s gorilla glass and most of the internal semiconductors couldn’t exist without synthetics derived from oil. Florescent lights, pen ink, plastic bags, synthetic rubbers and other fibers on zippers, watchbands, connector housings, electric cords, switch plates, carpeting – All oil.
The world dreams of eliminating oil. But it’s just that, a dream. We’ve become so used to a world that runs on oil that we can take it, and how much of our lives rely upon it, completely for granted.
And we do.
But therein lies our opportunity. Oil is ignored and shunned – and therefore remains undervalued. And as it gets more ignored and shunned, it gets more undervalued each day.
We’ve had enormous roadblocks to see this disconnect turn into profits – most notably the pandemic. But we capitalized on the worst of the first strain of covid by buying oil stocks when the infection rate was at it’s peak in January and the vaccine first emerged, and we’ll do the same as Delta runs it’s course through the rest of the Summer and into the Fall.
One TRADE for you:
Actually – NO TRADE is the trade. I feel under tremendous pressure while writing these weekly notes for subscribers to find SOMETHING positive to do. And I really scour my repertoire of energy ideas trying to find something – ANYTHING.
And I can’t.
Let’s be real. It’s as important to save money as it is to make it, right? And, being out of oil and oil stocks for the past three weeks has CERTAINLY saved us money – also right?
Let’s keep that up.