Hard to beat a rally based on oil and banks. Both groups are signature sectors -- when they rally they show health and they show growth.
In some ways, you have to admire this good old-fashioned bull market in that when you get something entirely predictable -- the positive results stemming from the Fed's CCAR, or Comprehensive Capital Analysis and Review -- you still get a big move. We have been flogging Citigroup (C) literally for months, telling people it would be able to return a huge amount of capital and would be the big winner in the process.
This column originally appeared on Real Money, our premium site for active traders. Visit here to get great columns like this.
Even when it fell to back to $60 last month, we reiterated you had to be in this one because the company has laid out some aggressive targets and it is in much better shape than expected.
What happens? It does exactly what it said it would -- and for that you have a gigantic move. Nothing is a no-brainer in this world, but the simple fact is this had to be one of the most telegraphed upsides I can recall, so much so that we are ringing the register on some to right-size the position.
As for oil? What can I say? Once again, when we got down to $42-$43, everyone got negative and the stocks were tossed out universally -- as if they were all going back to levels that we saw in early 2016, even though the vast majority are so much better off than they were back then.
The whole selloff had an apocalyptic feel. As someone who actually bought some of these stocks for the trust, I almost felt like I was buying something that was about to be Amazoned. But the simple fact is that if you are, say, Apache (APA) , and your costs are $33 ALL IN, why must that stock be sold? Why must it be pounded down knowing that it's gigantic find in the Permian -- Alpine High -- isn't even reflected in the stock, as it is at a much-lower price than when it announced the find. Sure it is heavily natural gas, but last I looked there was nothing wrong with that given the way our country is going with heating and plastics.
To be sure there are possibilities that Cheniere Energy (LNG) is going to have to fight to get people to pay for natural gas that they locked in at much higher prices. But the world is not yet leaving fossil fuels, except for coal, and that's precisely where natural gas fits in.
Oil and banks -- makes you feel that it's worth looking at down-and-out retailers, doesn't it?
Visit here for the latest business headlines.