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The Asset Class You Don't Want to Miss

Scott Downing
Director of Research

The incessant chatter from the media lately has been about Gold breaking 1,000 and the Dow breaking 10,000.  You can't pick up a paper, go to a website, or watch a financial TV show without hearing about how bullish Gold and Stocks are right now.  And to be fair, we are also bullish on those assets, and have been for a while now.  But there is another sector that is even stronger right now that you don't want to miss.

If you are a subscriber to our FREE Daily TrendWatch articles, then you likely have stumbled across our weekly analysis of Oil.  Many people have been taking that for granted lately, and it might be coming back to bite them right about now.  The reason being is that a specific Oil niche has been outperforming both Stocks and Gold lately, and the margins are not even close!

Take a look at this chart comparing the GLD (NYSEARCA:GLD), USO (NYSEARCA:USO), SPY (NYSEARCA:SPY) and OIH (NYSEARCA:OIH) since the March 9 bottom in stocks earlier this year.  While stocks are up over 45% since those March lows, the Oil service stocks are up over 70% during that time.  This compared to the actual commodity of Oil shows the USO with only a 35% return during that period.  While people have been watching the commodity, the oil service names have really been moving.

If you want to by hyper focused on the near term, then we can look at the last 29 days going back to September 3rd.  The OIH leads the pack up 20.6% while the other three assets are hovering around the 7% to 10% return area.  This is a huge amount of relative strength in such a short period of time, and with the Macro-economic conditions that exist in the market right now, we are likely to see this trend continue through the end of the year, if not further.

When Price Headley and Bob Lang were last in Chicago in September, they talked about GOLD, Silver and Oil in this Video here.  They mentioned back then that we see Oil going to $90.  We just crossed $75 today, so there is still tremendous upside.  Don't miss out on this next Big Trend!

Disclosure:  Currently long National Oilwell Varco (NYSE:NOV) and Hess Corp (NYSE:HES).