Thursday, January 14, 2016

All Shorts Must Cover Prior To Collapse. Check.

This entire week was a short-covering rally in Energy stocks. The biggest rally since August. Exxon gained 10% from the intra-day Monday low...

Short-covering. Check. 
Decayed breadth. Check. 
Volatility trending. Check
Tech rollover. Check. 
Yen rollover. Check. 
Persistent buying/complacency. Check. 
Relentless oil carnage. Check. 

Exxon was up 5% today
 :15 min

Daily chart w/rate of change lower pane

The rats are leaving the sinking ship...
Why? Because as it was in 2008, institutions are moving all Energy exposure to the largest capitalization stocks with the strongest balance sheets...

Exxon as ratio of total energy sector:

As a ratio, oil stocks are still massively overvalued relative to the underlying commodity

Not withstanding this week's short covering rally, energy stocks are catching down to oil