RE:Looks like money's in the trade for now
Reality, I agree with you. The combination of the automated traders shorting the stock and tax loss season will push down the sp quite a bit in the coming weeks. After that, the rebound will be extremely strong in Q1 2015. Nice opportunity to accumulate on dips. See below extract from a CNBC article published today.
'The decline in energy stocks has come with free-falling oil prices that have seen West Texas crude drop nearly 30 percent.
While most experts agree that the decline has strong fundamental roots—stagnating global growth and competition from shale and other sources—history suggests energy companies can't stay down forever. When the sector has fallen to similar relative strength levels in the past, the ensuing 12- and 24-month periods have seen rebounds that are often violent, according to research from Sam Stovall, chief U.S. equity strategist at S&P Capital IQ.Stovall found that there have been six prior instances when energy stocks hit similar relative strength levels, and in five of those instances the return over the next 12 months was positive, with the only negative being a negligible 0.1 percent loss. The average gain was 13.45 percent, which was just shy of the S&P 500's performance. The results were even more dramatic for small caps, with energy shares outpacing their benchmark by 24.2 percent in the year after and 81 percent in the following two years. "Understandably, some energy investors are wondering if they should just cap their losses and walk away while they still have some money left. Opportunists, on the other hand, are likely thinking that now is the time to start buying," Stovall said in a research note. "The significant underperformance of these energy sector indices relative to their benchmarks over the past 20 or 25 years may offer more reason to be constructive than destructive of their energy holdings." The biggest challenge for investors, then, may not be if they should start taking advantage of the selloff in energy stocks, but when.
Jim Paulsen, chief investment strategist at Wells Capital Management, warns against trying to call a bottom in oil, but said investors should consider a reasonable price range and then start at least nibbling.'