iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
18,854 Blog Posts

SHORT OIL

A few narratives at play here with short oil.

1. Slowing global growth
2. Trump squeezing Saud
3. Oversupply
4. Long term switch to electric cars
5. Technical deterioration
6. High yield pressures

On the matter of high yield. We’re at the top end of the recent channel, poised to break lower.

Oil itself isn’t attractive here. More importantly, the underlying companies will soon become extremely distressed with the price so low. I suspect share prices will dive lower, in anticipation of these companies forced to raise capital via secondary offerings.

Bearish engulfing pattern is in effect.

Lastly, we have a clean breakdown below recent trend in the IWM, small caps. I expect small caps to underperform markets, and also provide insight into the overall mood of the plebeian investor.

Top picks: AU, NUGT, TLT, DRIP

If you enjoy the content at iBankCoin, please follow us on Twitter

9 comments

  1. mrcharlie

    Hey Fly do I HOFL the TZA over the weekend or is that a stupid question!?!?

    • 0
    • 0
    • 0 Deem this to be "Fake News"
  2. irma vep

    In other words, I think you mean that we are going to be thrown back into a chaotic, downward spiral. I think. Cogito Ergo Sum, Baby!

    • 0
    • 0
    • 0 Deem this to be "Fake News"
  3. jjj

    this would have been such a great post when oil was $70, now it is just dumb

    • 1
    • 0
    • 0 Deem this to be "Fake News"
  4. jonnybegood2

    strange time to short oil but who knows. i just went opposite and caught XLE at 61.84. Goes ex div next week. XOM at 75 is tempting but will wait until Monday.

    • 1
    • 0
    • 0 Deem this to be "Fake News"
  5. indie

    Short Canada.

    • 0
    • 0
    • 0 Deem this to be "Fake News"
  6. roundwego

    Why are you not shorting financials

    • 0
    • 0
    • 0 Deem this to be "Fake News"
  7. oilerua

    after this contrarian announcement is quite sure its time or closing time to trend reverse

    • 0
    • 0
    • 0 Deem this to be "Fake News"