Tuesday, March 17, 2015

At The Precipice: Betting On An Oil Rally

Energy stocks as ratio of oil prices:



Anyone betting on the overall stock market is betting that crude doesn't make another leg down, taking energy stocks with it. Right now, investors are betting with both hands that the overvaluation is all 'temporary', because oil prices "are going to go straight back up".

Oil stocks (red) with West Texas Intermediate (black). Right at the precipice: