Did you remember that we posted an article mentioning that Energy sector in US is going down on 5th Sep?
We said it because our market sentiment indicator on Energy stocks has turned bearish.
However because of the hype of QE, this action is delayed. Oil price and Energy stocks continued to march higher after a pause.
BUT 3 days ago, oil reached a high of $100.
Below is an article by yahoo stating the "REASONS" for the drop... in fact nobody knows y! Not when we have QE3 right? Shouldn't inflation expectation and the speculation money push oil higher? Wall Street could not find explanations
Today I am going to reveal to you the reason y Wallstreet don't know.
It is because Wall Street did not study our blog lah... haha ;). If they studied, they might be hedging by shorting energy stocks.
Ha, the real reason is that most of the Energy stocks in US are bullish, in fact 3 days ago, it reached a high of 97% of stocks being bullish, which is too overbought!!!
I know you may think with these 3 days drop, these stocks may come back up again. Temporarily yes they may, after the sharp drop in oil price and the stocks these few days. But I would probably take the opportunity to short it mid term everytime if it does rebound up.
Do not take the risk now... Energy sector may have reached its height. If you are not shorting, please just stay away for the time being!