Oil down to $73 – Big Woop! The Chairman says – stick with Oil and add some Health Care to manage the COUGH!

You would think that this Ceasefire and the original war in Lebanon were the reason that oil climbed above $70 if you were watching the News this morning.

It is not the reason, and won’t be the reason for a future collapse in the price of oil. That will have to come from demand – MUCH LOWER DEMAND.

There is a $20 to $30 terror premium now permanently embedded in the fuel from all the crazies around the world willing to disrupt it’s flow.

The rest of the price rise is from INCREASING DEMAND in ASIA – period.

I linked to The Chairman’s energy chart yesterday which he interpreted as still bullish and a conversation ensued. He responded to me with the following:

Howard: Who knows, maybe I’ve been adding at the top … time will tell. All I know is that I sit in traffic for 30 minutes to go a mile and I live in Beijing… there are hundreds of thousands of idling cars here that didn’t exist a few years ago.

He is sooo right. Take a stroll over to and do some traffic in asia searches .

Here are a few pics:
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All kidding aside – the two health care indexes I am watching are RYHIX (Rydex helath Care) and an ETF with the symbol (XLV).

The Chairman also owns some Big Pharma which you can own in an ETF by the symbol PPH.

6 comments

  1. Pingback: The Blogging Times - MarketWatch » Oil down to $73, stick with Oil and some Health Care
  2. BDG123 says:

    Howard,
    New to the blog but love it. I’m curious as to your comments about oil based on a volume analysis of the OIH I did on August 2nd and a buying pressure analysis of Valero on July 20th. They are looking mighty ratty to me. In addition, my long term quantitative model for equities is now on a clear sell. My work isn’t perfect but it has held the test of time quite often.

    I view the ISE Sentiment data as relatively useful anecdotal data in a bull market but in this cycle, I am quite confident sentiment will fail for quite a long period of time as it has many times in the last one hundred years. ie, Historically sentiment has remained bearish for well over a year at times. JMHO. Thanks for the blog!

  3. Howard Lindzon says:

    Thanks BDG,

    I dont trade that much but have been short the OIH on and off the last few months when I do trade oil.

    The index looks awful but I am not good at calling tops or bottoms.

    I have to agree with you on the sentiment stuff. It is just one weak tool and the tape is what I watch

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