Greer: There’s Good Reason To Be Bullish On Oil

Your Real Vision Daily Briefing for September 22, 2020

Senior editor, Ash Bennington, welcomes back Tony Greer, editor of the Morning Navigator, to discuss the ongoing inflation trade.

  • Tick Index patterns can be useful for analyzing how securities are trading and when to buy on the dip.
  • We are approaching an inflection point in fossil fuels as oil stocks fall out of favor and trends turn toward sustainable energy and ESG investing.
  • Oil may be beaten down now, but once people realize that fossil fuels aren’t going anywhere there could be a tremendous turn around and some exciting trades on the upside.

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Things are exciting in markets when we’re trading at this level of volatility, Tony Greer, editor of the Morning Navigator, told Real Vision during today’s Daily Briefing.

Greer touched on the news that all three major indices are off 5% from their highs and said we’re doing ok all things considered. The market backed off and people got bearish yesterday, but today was turnaround Tuesday with FANG stocks up 4% and tech subsectors up 2% and homebuilders rallying on existing home sales. Different things are motivating the market every day, he said.

Greer also discussed one of the technical indicators he uses to analyze different securities: the Tick Index. He said watching the data is useful because when you’re in an uptrend, and you see several consecutive days of extreme tick index prints, it’s a place you can think about buying stocks on the dip.

In the 10 years of bull market trading we had after the financial crisis, Greer said it was common to see two or three days in a row of extremely heavy selling. In a multi-year uptrend, those were your chances to get in, which is why he continues to watch the Tick data during this rally. “It’s a gauge on the dashboard,” he said.

Greer also shared his long-term view of the energy sector during the interview and explained why he remains bullish on oil. He said the prefers to trade the commodity rather than energy stocks and he is only trading oil from the long side.

He believes we are approaching an inflection point in fossil fuels; oil stocks are being thrown out, the shift to sustainable energy is contributing to weakness in the energy market, and ESG investing is causing people to ditch energy stocks. Greer believes there will eventually be a tremendous turn in this market when people realize that there are still cars on the road and planes in the air that rely on fossil fuels and oil will start performing again and will become a value play.

Until then, he’s paying close attention to the beaten down stocks and looking for when they turn and thinks there will be some exciting trades on the upside. His sleeves are rolled up in the energy trade waiting for that momentum swing, he said.

RELATED CATEGORIES: Daily Briefing, Market Analysis