Turn Out The Lights, The Party Is Over

Ok, I'm going to date myself but when I was much younger, "Dandy" Don Meredith was a preacher at the church I attended. The church of Monday Night Football. Don would start howling this ridiculous song whenever there was a blow out game.

Well, the Wall Street scam on "peak oil" is likely over as well. America has more oil in the system than at any time in the last ten years. That includes when oil was $10 a barrel. We have plenty of oil and traders have convinced each other and the public of many fallacies. One is that all of this Middle East tension could or what if Venezuela does or what about China, blah, blah, blah. There's been global tension and global growth since the beginning of time including when oil was $10 a barrel. By the way, China needed nearly as much oil as when it was $10 a barrel. It's all hogwash. Wall Street fell in love with a story and there are more traders pushing up the price of oil than anyone could ever imagine.

I also stated that the Wall Street traders and hedge fund traders would drive oil up until they killed the economy. That outcome appears to be coming to pass as we speak. Will oil go back to $10? I don't think any time soon but I could see a day many years from now when it is under $20. Regardless, it doesn't matter. A slowing economy has the potential to take oil stocks down quite hard. Above is the three year chart of Valero, one of the biggest energy darlings on Wall Street. It is up over 1,000% this cycle. Overlaid on the pricing chart is buying pressure. Well, it appears there is less and less buying pressure the higher Valero climbs. Smart money is likely liquidating their positions. That's not a good sign. I believe Dandy Don is going to start singing quite soon. Turn out the lights............