1pm update - the junk is soaring

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.


CHK, daily

SDRL, daily

Summary

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.
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*I have ZERO interest in meddling in what remain beaten down stocks. I will merely look to short the broader indexes around mid March.
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back at 2pm