Bolling: Chevron, Tesoro Ready to Roll

Editor's Note: Today, we welcome Eric Bolling to TheStreet.com. A top Wall Street trader and an on-air television personality for the Fox Business Network, Bolling specializes in commodities, technology, resource trades and ETFs. He will provide regular picks in a column for TheStreet.com.

Today, I'm turning my attention toward refiners. I have traded oil for 22 years so it makes sense that I start here.

The oil patch is ripe with a few great plays, and I will lay them out for you and the rationale for the picks in the column, the first in a series of regular features I will be writing for TheStreet.com.

Oil hit a record $119.93 before falling $9 by last Thursday. Then it bounced almost $4 on Friday. I have been a long-term commodity bull and remain so. However, with many of my favorite commodities in a corrective mode, I think the crude oil market is due for a sizable pullback.

Much of the hype around the commodity run has been credited to the weak U.S. dollar. I agree that a weak dollar adds to physical commodity prices, but the dollar has been retreating for a long time. Only in the last 18 to 24 months has the commodity play really rocked.

The oil picture is more about money flows than dollar pricing. The hedge fund community has a bankroll of about $3 trillion to $3.5 trillion. I suspect hedge fund traders will be sticking with trades that are doing well and moving dollars in unsuccessful positions to ones that are working.

Those in the real estate/homebuilder sector will move their liquidity to crude oil. We all know how the real estate-homebuilder trade has fared in this housing recession, but for those who don't, HovnanianHOV, PultePHM, BeazerBZH, etc., are trading just pennies on their 2006 dollar values.