My opinion on oil and oil companies, for whatever it's worth.
I've been around a long time. I have seen several boom and bust economies and how things looked before each trend changed. One way to tell a change from boom to bust is big company earnings. Companies like IBM, AMZN, WMT and those that touch a lot of people. I've noticed a down-turn in many big company earnings. Look at MCD recently. Now oil is dropping like a rock on less demand and over supply. Now look at QE, the fed is all done pumping money into the economy and they will be raising interest rates sooner than most realize. Higher interest rates equals death for stocks.
Look at Europe and Russia, they are already in recession for the most part. China has slowed and that is a real tell-tale sign. All one has to do is pay attention and signs of slow down are everywhere. The very same thing happened in 1999, Europe slumped and the US followed in 2000.
Last, but perhaps the most important is what the market is telling us. Energy stocks sector helped lead us out of the last recession. It was one of the strongest sectors then and through out this entire bull market since the 2009 recovery began. Also, small caps in general are collapsing and are the start of a general market down-turn. IMO, large caps are in distribution and are being held up until the big boys liquidate their positions. Then watch what happens to the market.
Anyway, those thinking that oil will rebound soon may be hurt. If the oil cartel cuts production, that will bounce oil for a time, but it will be a short-term fix, IMO. Bottom line, we've been in a boom economy and stock market for quite a while now and signs are pointing to a reversal. Just be prepared. The above is all my opinion based on tell-tale signs.
