Bolling: Head for the Exits on Integrated Oil
06/09/08 - 10:20 AM EDT
Eric Bolling
Congressman Stupak's comments sent shorts like mine scrambling for the same door as the aggressive fund managers looking for the opportunity they were waiting for. At the end of the day, oil shorts and new longs raised the price a staggering $5.49 per barrel -- a move never before seen.
That turned out to be just the tip of the iceberg. On Friday, oil started out unchanged in early morning trading (believe me when I tell you I watched all night). Ask any technical trader (most of my trading is supported with technical analysis -- chart analysis, volume, overbought/oversold indicators and more), when a market spikes and holds the spike level, assume it will trade higher. Oil didn't disappoint. It was boosted by an early morning call from a Morgan Stanley analyst that oil might touch $150 by July 4, of this year. That, combined with rumblings out of Israel that an attack on Iran may be forthcoming for failing to adhere to United Nations' resolutions regarding their uranium enrichment program, sent oil soaring. When the dust settled, oil was up $16 in the two sessions and 8.8% for the week. One very interesting thing happened on the way to $139ish oil. The oil stocks reversed lower! After being up all day Friday, Conoco Phillips(COP Quote - Cramer on COP - Stock Picks) dropped 1.7%, Exxon Mobil(XOM Quote - Cramer on XOM - Stock Picks) lost 2.8% and my favorite, Chevron(CVX Quote - Cramer on CVX - Stock Picks), shed 0.5%. Even the diverse Energy Select SPDR ETF(XLE Quote - Cramer on XLE - Stock Picks) lost a noticeable 2%. This weakness in a sector that should have been more resilient is telling for me. I am reluctant to be in big oil right now. There may be a few forces at work. It may have been a "sell anything that is up for the day" mentality by funds trying to cut into losses realized elsewhere. It could have been those seeing a truly weak economy as a foreshadow to November.
RSS
