Crude oil price is back to $64 or $65 range. But energy ETFs have been at its level two months ago, much lower than the previous peak in mid March. I see this as a sector rotation out of the cyclicals to large caps and particularly big techs in preparation for the earnings season. I'd see the reflation trades back on. Bond yield up, weak USD, higher commodity. Almost everyone knows about the earnings trades....
I have been focused entirely in Canadian commodity related plays since October ( oil, nat gas, copper, silver, gold ). I alter my weightings based on news and trend but keep my hand in all of them because the best moves often start overnight. I'll switch my focus if the macro situation changes but I doubt we are anywhere near there yet. Besides, there just isn't a lot of value in other areas at this time. Gold struggled at times so I actually was at zero positions briefly before the absolute bottom, but the more active miners are showing moderate strength recently ( like they are poised for a reason to move ). This week, there is growing strength in Oil, Copper, and to a lesser extend Nat Gas. Gold and Silver are holding up recent gains nicely as well. The related stocks are a mixed bag but it wouldn't surprise me to see a large move in Oil and Copper stocks maybe even tomorrow ( some of the copper plays have already gone up ). Often these disparities between the commodity price moves and the stocks themselves rectify in sudden sharp moves. Might be a TSX thing not sure.
Yes, the retail guys normally only trade the meme stocks and the big techs. And the the Bitcoin and Coin. Now the Dogecoin too.....
Pulling back now...I am holding here as I expect this all setting up for a big move to the upside in the coming months.
My guesses : Oil will touch $64 again sometime between now and 10 am tomorrow. Gold will touch $1805 within two days.
My April 20 call was a week early but really paid off since ( oil, copper, nat gas related stocks ). The big money is jumping into companies close to or at 52 week highs, especially mid caps. On the TSX, for instance, we got new highs ( or close ) in BTE, ATH, TVE, ERF, CJ, GXE ( all Oil ); BIR, ARX, NVA ( Nat Gas ), HBM, CMMC, ERO, TKO ( Copper ).
Look at the YTD returns of all the sectors. The QQQ has been just horrible. Banks, energy sectors all doing really well. This may continue.
It's a good risk/reward to hold energy plays on the chance of $80 Oil until such point as the momentum is clearly over. Nat gas stocks have been really strong lately I'm hoping for the $3 level to break. Green energy may provide some value here I only follow one stock but it's sold off most of it's rally since the election already.