Energy at top? Does ANYONE believe this?
Posted 21 August 2005 - 09:01 AM
a bubble waiting to burst. I DON'T THINK SO.
But alternate opinions, with REASONS sought.
High fat cookie,
Posted 21 August 2005 - 11:08 AM
CC, demand for energy is still increasing faster than supply, so I tend to agree with you. However, the fundamentals often look darn good at market tops.
The momentum upwards on the charts was so strong that I would expect more divergent action at any final price high. And of course the market won't necessarily give us what we expect. (Duh!)
The last advance to the August high was steep. Nothing new for this market. Doesn't feel like an ending, commodities-style blowoff parabolic top to me, but you never know.
In early 2003 oil fell hard, $40 to $25, roughly a 40% haircut. Late last year, whammo - down from $55 to $40, almost exactly touching the top of that early 2003 peak. Quite a pretty chart, but even in the context of the Big Bull such stuff can occur.
Looking at the charts, we may have completed the rally from late last year, and that was a $40 to $67 move -- significant. Could have also finished the long rally from the end of 2002 -- looks like five waves up there too. If so, even in an ongoing bull market, we could pull back to $40 without destroying overall bullish wave patterns.
Natural gas prices are holding up very well. Oil has declined steeply, but hasn't even really tested the support of the July high right below $62.50 -- the last little top prior to the August high. Last Thursday there was an intraday move lower but it couldn't get down there, and closed back up near the day's open, to be followed by going higher Friday. Thus far, despite some significant declines in energy stocks, oil hasn't done anything more than the little fall after the June high.
Valero Energy went down far enough during last week that its P/E was 10. Is that a buy or what? Seems like it, to me, but I may have fallen in love with this market. For now, I think we need more chart action. The wave structure coming down from the recent peak, or from later ones if we just go back up now, should give us good clues.
Oil zoomed up $10 in only three weeks to the August high. If we haven't topped out, and really blast off higher later, i.e. really do go parabolic, then I'm gonna sell some, no matter what.
Posted 21 August 2005 - 01:57 PM
Posted 21 August 2005 - 02:21 PM
Everybody, who ever everybody is, wonts to hammer out that energy is at the TOP. There are several reasons for this from the brokage houses, but should not concern us . The broad XLE has formed a shallow topping action and only time will tell if it is going to get worse. Money does appear to be flowing out of this unit. Now for the good stuff, oil and gas stocks I think will consolidate in a flat to slightly down trending pattern and take off again after labor day. Yes gasoline consumption will decline "some" but the shortage will stay the same or get worse as some refineries have already switched to making heating oil. I got stopped out of some of my trading stocks, SJT, ACI, MEE and others, BUT, I still have them in my core accounts and will start to buy back into the trading accounts Mon or Tues. Of cource the buy back depends on price action etc and may wait longer, time will tell.
Just some rambling thoughts, Doug and C.C. best to the both of you.
A DOG ALWAYS OFFERS UNCONDITIONAL LOVE. CATS HAVE TO THINK ABOUT IT!!
Posted 21 August 2005 - 08:51 PM
Edited by calmcookie, 21 August 2005 - 08:56 PM.
Posted 22 August 2005 - 10:22 AM
Posted 27 August 2005 - 11:48 PM
Edited by Sentient Being, 27 August 2005 - 11:52 PM.
~ Johann Wolfgang Von Goethe ~
Posted 28 August 2005 - 12:34 AM
For me, right now, it's a steady drumbeat of news about high gasoline, high oil, and the stocks (which I think should lead) diverging against crude, which is showing some divergences itself, and a possible double top, against the earlier peaks in March, June, and the first August high.
I know that oil is in a longer-term bull market. And it's that sentiment that contributes to me wanting to sell some, right now.