This column was originally published on RealMoney on Oct. 5 at 11:27 a.m. EDT. It's being republished as a bonus for TheStreet.com readers.

No, the inventories weren't too large. No, we aren't using less energy. Yes, the oil stocks are going down.

What's going on?

I think some people are locking in gains. I also think this is the wake of the markups we had last week when many of the mutual funds took up stocks for a week, only to let them drop now that the new quarter has begun.

I think you pick into the weakness. I don't think you can start believing in conservation. That's nonsense, even as I wish it weren't true.

In the end, this market is driven by earnings. I don't think the British Petroleum ( BP) screwup will be shared by others, other than perhaps Shell ( RD), which is another extremely poorly run company.

But all of these oil companies are being punished equally and all are experiencing profit-taking simultaneously, like they are one giant ETF or something.

I am not saying the profit-taking is wrong or stupid. I am just saying that you shouldn't believe we are morphing into an oil bear market just because we got "good" inventories and the stocks went down anyway.

Bottom line: Add to positions into the weakness, as the big funds that benefited so much from oils will be buying them soon again, along with the new funds that are soon to be coming into them when the marketing budgets ramp and the press coverage of mutual fund winners begins.

Random musings: One thing I really like is that I am hearing crash talk again, as if something really big is about to happen. A few more weeks of that talk and we could be set up for a nice rally. But not yet; it has to build more.


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