Whilst the broader equity market is seeing a day of moderate weak chop - ahead of the Friday jobs data, there is notable hyper strength in a great many of the obliterated energy stocks. Chesapeake (CHK) is +22%, whilst Seadrill (SDRL) is +18%. Broadly, both companies remain on track to... disappear.
I dread to think how many retail amateurs have been trying to 'average down' in many of the energy/resource names since the 2011 commodity peak.
What should be clear... the current gains are entirely unsustainable.
I do not expect CHK or SDRL to last the year, and they are but two of a long list of listed names set to disappear.
Capitulation remains due in the oil/gas/mining sector.
*I have ZERO interest in meddling in what remain beaten down stocks. I will merely look to short the broader indexes around mid March.
back at 2pm