Rotation into Energy stocks continues to pick up. While the reward/risk opportunities at the sector/subsector ETF level aren't great, there are several attractive setups within individual stocks.
In this post I'm going to point out seven names within Energy ETFs XLE, XOP, OIH, AMLP, CRAK, and FCG with extremely well-defined risk and skewed reward/risk at current levels.
Half are buying strength (higher probability, but lower reward/risk) and the others are mean-reversion setups (lower probability, but higher reward/risk). Pick your poison.
I just finished writing a free post for All Star Charts India following up on where we've been over the last two months and what this last week of price action means for Indian stocks in the near-term.
As I was writing up the post I noticed a lot of similarities between US Stocks today and where India was just a few weeks ago.
I'm going to summarize the key points, but I'd encourage you to read that post in full so you can really see what I'm talking about below.
Sometimes, stocks you want to own give you no chance to get in comfortably. They just start running and offer you no pullbacks to buy into. In hindsight, these are always the ones we wished we woulda just closed our eyes and hit market buy on. Of course, in real life and in real time, it's impossible to know when you're looking at a stock that is going to run straight up. One such stock that has given me a little of this FOMO (fear of missing out) has recently offered us a slight window to buy into. And at the time of this writing (Monday morning, April 22), S&P Futures are indicating a gap down opening for the broader market, perhaps adding to our chances of getting in at a better price.
Interest rates all over the world made new lows last month and have since then tried to start a recovery. We're seeing this across the developed world in the U.S., Germany, UK and Japan, among others. Meanwhile, journalists at Bloomberg Business Week decided to put a dead dinosaur on the cover of the latest issue asking, "Is Inflation Dead?"
How come we never hear that in the financial media? Because they don't want you to say that.
How come we never hear that from the sell side analysts? Because the institutional customer will just call another desk at another firm with an analyst that has an opinion, and they will get the trade and earn the commission.
As humans, we're just not built for this. It's hard to admit you're wrong and move on. But the truth is that none of us know what is going to happen next, especially in the market. So to admit that you don't know is not only okay, but is actually fact.
In this video I sit down with David Keller to discuss this very topic:
A stock of interest for us recently impressed investors with their latest earnings report, sending shares on a gap higher at the open today. Now that the event is out of the way, options pricing (in terms of volatility) has collapsed, giving us a great opportunity to participate in what looks like an ideal candidate for a "Post Earnings Drift" move higher.
A big theme for me this year has been the US Dollar and how it will impact stocks as an asset class. The thought process coming into 2019 was simple. The Dollar had rallied throughout 2018 to reach some pretty critical levels. The idea was that if the Dollar was going to rip right through there, it was more than likely happening in an environment where investors would be fleeing to safety. That's the type of market where stocks are selling off. The opposite of that argument was that if the Dollar was not breaking out, that stocks would likely be doing well, both in the U.S. and more importantly globally.
Fast forward to today, almost 1/3 of the way done with the year, and stock have performed very well. In fact, as Piper Jaffray's Craig Johnson mentioned in this week's podcast, stocks have had an incredible entire year already, just a few...