The Bull Case For Crude

“Remember this: When you are doing nothing, those speculators who feel they must trade day in and day out, are laying the foundation for your next venture. You will reap benefits from their mistakes. Speculation is far too exciting. Most people who speculate hound the brokerage offices or receive frequent telephone calls, and after the business day they talk markets with friends at all gatherings. The ticker or translux is always on their minds. They are so engrossed with the minor ups and downs that they miss the big movements. Almost invariably the vast majority have commitments on the wrong side when the broad trend swings under way. The speculator who insists on trying to profit from daily minor movements will never be in a position to take advantage of the next important change marketwise when it occurs.” ~ Jesse Livermore, “How To Trade In Stocks”

Good morning! 

In this week’s Dirty Dozen [CHART PACK]  we go through the latest Fund Manager Survey, look at a record low allocation to tech, make the case to be cautious US stocks as well as the bull and bear takes for bond yields, before finally diving into some setups in crude, PM miners, and a LatAm E&P, plus more…

Let’s dive in. 

***click charts to enlarge*** 

  1. Fund managers around the world are “unambiguously bullish”, a record majority expect “above-trend” growth and inflation, and they collectively have their lowest allocations to tech on record, according to BofA’s latest FMS. At some point, Bernard Baruch’s dictum that “something that everyone knows, isn’t worth anything” will begin to matter as growth & inflation expectations over-discount probable paths. We’re not quite there yet but we’re getting close…

  1. Gavin Baker, a portfolio manager, and favorite Twitter follow of mine, made a compelling case the other week for buying secular growth stocks (link here). I’m not sure I’m sold yet on growth’s prospects at the moment. Many of the big names (AAPL, AMZN, NFLX, etc…) are in large Stage 3 distribution phases. With that said, it’s always important to have a few names researched and ready to go should the picture change.  
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Disclaimer: All statements are solely opinions and are for educational purposes only.

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