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Nice Bounce, Holding My Breath

The bounce in energy stocks could be a suckers rally but it may not fail until after quarter end. Be careful going long any energy positions until after the FOMC meeting and preferably after July 4th. The rebound from the June lows is fragile and we need funds currently sitting on piles of cash to become brave enough to reenter the sector. This may not happen until the lows are retested.

We are going on a summer position diet with a target of 7-8 positions total before late July in anticipation of a late August price dip in oil. If we get some hurricane activity it should push prices higher for one last rally before the demand drop in August. That will be buying time again for energy.

Jim Brown

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