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1) Lousy week for the oily stocks which underperformed the market as they moved lower with oil. This was the first week in six that the XOI has underperformed the broader indexes. The XOI contains a mix of majors and large cap independents and these stocks have for the most part experienced upward estimate revisions due to higher than anticipated 4Q oil prices. In fact this past quarter was the biggest surprise in terms of actuals to estimates in recent memory.
I'll have some commentary about where I think we could see some surprises this week.
2) Gassy stocks fared much better as natural gas turned in another strong performance. Click here to see my recent thoughts on gas. In a nutshell we're probably close to topped out in the extremely near term as weather turns warmer and comparisons relative to year ago levels get more difficult.
3) CFTC Shows Traders Still Very Short. A slight cover may have helped drive NG prices over $8 in the last week. Taken together the following two charts show the potential for the herd to be right in the medium to long term and wrong in the short term. In case you are wondering that first low point in July 2007 on the first chart reflects record amounts of net short interest.
4) Transportation rates continue to get pounded. See Friday's post for thoughts on the dry bulk sector. I'll have some fresh commentary there this week having had lunch with a transportation analyst on Friday.
5) In the week ahead look for a continuation of the sector multiple updates as we visit the solar and E&P sectors. Also look for a briefing on E&P names most like to cruise or lose as the upcoming quarter is released.
6) Closed Positions for January Watch: (quiet month so far)
