There are only two options regarding commitment; you’re either in or you’re out. There’s no such thing as life in-between. -Pat Riley
I’ve been talking about coal ($KOL) lately on Stocktwits. I like the group. The planet earth hates it, I like it. I will have to wait to be right, I know that, but that’s OK. Sector rotation is still the name of the game and I want to be long before the charlatan analysts in their ivory towers all get bullish at the same tome. They are a herd, they will do this, its just a matter of when. The first one will blink bullishly and the rest will join in. $WLT was posted as my number one stock for 2012 on January 1. Not only is it my favorite stock in the sector, but my favorite stick period. I own some others in the group as well.
We are still rotating and money will eventually go from the overextended names to the oversold names. Big new money is not in this tape yet, and until that happens I am expecting a strange churn higher.
I wanted to talk about energy though. I don’t mean crude itself (goes higher imo), but the energy stocks. I have been watching oil stocks that have been getting pulverized. Same scenario as coal, they hate em’ until they don’t.
I have been watching $XLE with keen interest over the last few weeks. Last week the $XLE put in a bullish engulfing candle on it’s weekly (after putting in an essentially “flat” performance the week before). This could be a head fake, or it could be the start of a run that lasts for a while. If it’s not a fake, then I have a handful of names that could rip higher, aided by shorts that will forced to cover. I am seeing so many quality names right now that have at least 10% in them.
As I think about this, I’m convinced that “The Bernank” sleeps next to his remodeled and newly polished printing press. Rumor has it that he sets the alarm in the wee hours to dust it and give it Keynesian hugs by the moonlight. Model # QE32012.
We’ll see if it happens, but perception in the interim, can be reality.
You can subscribe here, if you want to learn more about where I am going with this and other specific trade set ups. Eight months to go this year, Giddy up.
Have a great weekend,
Joe