Thursday, May 17, 2007

Oil Again

Oil continues its strong run up. All of my favorite oil stocks have been performing well. Again I see strength particularly in offshore drillers with international exposure, and in refiners. Noble (NE) and Global Santa Fe(GSF) look good for the drillers, and I continue to like Frontier (FTO) and Valero (VLO) for refiners.

I'm starting to growing weary on the rest of the market though. The April retail reports came in pretty light. I'm still concerned that the mix of inflation and high gas prices will hurt the consumer more than people think. Here is a nice article to read more about this.

But this bull market is being driven by corporate activity rather than consumers.

For some sell-side exposure, I'd look at an ETF that shorts the Dow, which is (DOG). I see little downside risk in this. If the market continues to climb, it won't do so as quickly as the last month. I do see a potential correction to be likely. The volume traded in the fund is rising, which I see as a sign that investors are thinking the same thing. It traded 3x the average volume in today's action. We'll see what the future brings.

No comments: