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ExxonMobil, one of the world’s largest energy companies for the past 20 years, has been left in the dust by a renewable energy company barely 20 years old.
Indeed, fossil fuel's falling out of favor in the market is great news for our trading because we can make way more trading on renewables than we ever could make trading on oil.
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In July 2008, oil hit an all-time high of $147.27.
And since then, it's been in a choppy 12-year downtrend.
Then after hitting an all-time low this past April, it's currently sitting at $42 a barrel.
While you shouldn't completely dump oil stocks, as savvy traders we've found a new way to profit on energy by shifting our thinking…
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Despite poor earnings performance, investors reacted positively to BP's recent announcement of a new green initiative, causing BP shares to rise nearly 8%.
But our Andrew Keene isn't seeing eye-to-eye with those rushing to purchase some shares of BP right now.
So here's what to buy instead if you want to profit...
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Investors could become defensive if we don't get up to 3,150 and close above there for a couple days in a row.
To see when we might dip, Chris said to keep an eye on the VIX.
Right now, the VIX below 30 is a positive indicator that investors are optimistic about stocks.
But there are two key levels to watch: the VIX at 30, and then 35.
A break above both would be an indicator stocks could be ready for another correction.
Chris will update Markets Live viewers Monday at 8:45 a.m. on his next real-time broadcast.
Make sure to tune in.
And until then, Chris did give viewers this trade recommendation...
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It feels like 10 years ago, but it's really only been about seven weeks since that fateful April 20, when a COVID-19-driven collapse in demand pummeled West Texas Intermediate crude oil futures. Prices hit the floor, fell through it, and landed in negative territory at -$37.63 a barrel.
In those seven weeks, WTI has rocketed almost 200%. The S&P Oil & Gas Exploration and Production Select Industry Index has risen nearly 70%, though it's still down more than 24% for the year.
Over the past few days, though, oil benchmarks have been creeping 2% and 3% lower, which in my experience is a big, neon sign saying "Selling Ahead." And several marquee energy stocks like Occidental Petroleum Corp. and Halliburton Co. are also flashing sell-off warnings.
This reminds me of the old Road Runner and Wile E. Coyote Looney Tunes cartoons – remember them? One of the (many) cheesy running gags had Wile chasing Road Runner only to overshoot him at a cliff. Wile would hang there in midair for a second, have a "Maalox moment," and then drop.
That's not all that different than what's happening in crude right now. Both the commodity and most of its associated stocks entered what market technicians like me call "overbought" territory. Now they're dropping like rocks. Investors are starting to figure out if they're in over their heads.
How do I know? The answer is worth exploring because it can make you a sharper trader. There's one simple, small number you can look at in any stock chart that can tell you instantly how to play it.
I'll get into that briefly and then I'll tell you how to play the oil patch's precarious "Wile E. Coyote" situation… Full Story
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Oil prices have recovered nicely since the madness of negative prices back in March when Saudi Arabia and Russia decided to engage in a price war just as the coronavirus swept across the globe crushing demand.
While the recovery probably helped hold off a wave of bankruptcies among shale producers, it is unlikely we see too much more of an increase in oil prices.
The demand will not be high enough to push prices significantly higher…
The world economy was weak before the coronavirus shut down a vast swath of the global economy.
The post virus recovery will take a long time, so it is likely oil prices remain range-bound for an extended period.
You see, the drop in prices caused steep sell-off in almost all energy-related securities over the past several months.
The midstream segment that transports and stores oil got hit right along with producers.
And that has created a massive opportunity for these two high yield dividend stocks...
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The price of oil has fallen as much as 57% since the start of the year.
There was even a point this year when demand for was so low, the price of oil went negative.
That means people were getting paid to hold oil.
Today, we're going to tell you what that means.
Then we're going to show you a couple high-yield dividend stocks you can buy to profit from the historic oil price collapse.
One of our best high-yield dividend stocks right now pays a yield of 19.66%.
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Oil prices took a historic plunge this year.
At one point, they even went negative.
Investors lost their minds.
But would you believe this unprecedented crisis can actually be good for some oil companies?
Crude has plunged 46%, from above $60 to near $15.
That's accompanied a huge selloff in top oil stocks like Royal Dutch Shell Plc (NYSE: RDS.A).
The company has lost about 44% since the beginning of the year.
But that does not mean it's time to ignore oil.
You just have to shift your strategy a bit.
Today, we're going to show you a dividend stock that actually benefits from plummeting oil prices.
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What happened to oil yesterday was the greatest collapse I've ever seen in any commodity, ever.
And barring some unforeseen apocalypse, we'll never see it again.
This just doesn't happen in the commodities market. Every once in a while in a stock, sure, you'll get a case of fraud or someone goes bankrupt. The stock will go to $0 over time.
In the commodities world, there's a bottom for prices. This doesn't happen. Until it did.
Oil futures traded at a negative price for the first time in history.
We had the perfect storm for an oil collapse.
Demand is down. No one is traveling, and global manufacturing has plummeted.
There's a price war. Saudi Arabia drove production way up, and Russia joined them. Now there's estimates of up to 30 million barrels a day of extra oil being produced. Even with a production cut, there will be 20 million barrels a day being produced with nowhere to go.
All that oil needs to be stored somewhere, and world is running out of places to put it.
Futures contracts are tied to physical delivery of a commodity. Everyone dumped them because they have nowhere to put that oil.
No one wants oil right now.
And that's why this oil story is so troubling – it's very much a demand story, not an oversupply story…
What to Do When No One Wants Oil
An oil trading firm in Singapore, Hin Leong, kicked off oil's trouble. Hin Leong buys and sells large super tankers filled with physical oil to distribute through Asia.
Sunday night, it told the world it had a non-disclosed $800 million loss from trading oil. To cover the loss, it had to liquidate oil futures – a fire sale. It had to sell… Full Story
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The economic impact of the coronavirus outbreak is more apparent after the Dow Jones Industrial Average posted a more than 500-point loss Wednesday.
But you already knew this was coming.
We've been calling the "dead cat bounce" for weeks.
So now is the time to buckle down and make something of what you know.
We have an options trading strategy that's already earned readers more than 1,000% this year.
And it could work again.
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