Don't let anyone spin this as a good thing. Here are ten reasons why this mess continues on Monday.
1. During the first wave and initial Covid discolusre markets were rattled for weeks and months. Very naive to think oil markets will rebound on Monday. This is going to play out until at least Christmas. Continued lockdowns and fear will fuel the day. Markets don't like unsettled news, this will hangover us for some time now. This is a black swan event and not a good sign moving forward. This could be an epic reset to the downside.
2. Brings us to point 2, with all these newbie investors up 800 percent on energy stocks the first sign of a pullback will accelerate selling and especially now with tax season upon us. If you were up 800 percent I would sell to at the first sign of a major pullback.
3. The dead cat bounce from $3.66 to $3.80 today was just that. The market was willing to selloff to $3.66. There is no floor now, this is a falling knife scenario.
4. The recent trading pattern of up 40 cents, down 40 cents, up 40 cents and down 40 cents is a bad sign technically.
5. 50 million SPR release and continued pressure on nations to continue to release.
6. The COP conference, 200 nations have pledged to cut emissions.
7. Massive dilution of BTE shares, hard to recover losses for those who bought at $50 like me.
8. When there is blood usually there is more blood. When traders seee their portfolios on Monday I expect more carnage. One sale leads to another and it's a snowball effect.
9. Biden wants to lower gas prices and has pledged to be 50 percent electric by 2030.
10. Oil price. BTE was way at $80 oil, at $70 oil not so much. In my experience following a down day the next day is usually down. I expect oil to be down $5 on Monday.
I could go on about hedging. The variant was obviously not baked in today. One thing Covid has proven is people won't listen and won't get vaccinated in big enough numbers. It's not going away. Also, the DOW is due for a major letdown. Demand hasn't picked up enough and the rally hasn't been backed by a true recovery, too many gaps in the data. The floodgates will slowly open and it's going to get ugly here.
Also, the new discovery is already baked in so Clearwater won't do much. There are no catalysts to move oil here and demand is going to be met by supply. Shake is in the rise and OPEC hasn't done anything. Oil clearly overshot to the upside and now it's going to overshoot to the downside. Today was not a buying opportunity but a warning of his ugly things can get fast.
I will never realize my dream of selling at $5 and Fukuoka expect to get to $3 before $5. My original stance was if things don't hold it doesn't matter. If this goes back to a penny stock or under $3 being over $4 won't have mattered since it couldn't hold.
So much for blockbuster earnings. Finally, the debt. It's painful to be 1.4 billion in debt.
For the guy who said I have no reasons I just gave you ten that worry me for Monday trading.