How 'Bout Some Positive Energy

[] Trading is very difficult in negative momentum environments. But investors are able to look for attractive long-term ideas in the energy sector. [View in browser]( [View in browser]( [] [Godesburg's Haven Investment Letter]( [] [Godesburg's Haven Investment Letter]( [] Here's Some Positive Energy [Garrett Pic] Market momentum is Yellow. Markets pushed toward resistance again Monday, but peeled back on two occasions. With earnings season underway, capital is returning to the market. Tomorrow, we have two critical earnings reports from Goldman Sachs (GS) and Netflix (NFLX). Cash remains your ally while energy remains our only positive sector for active upside trading Dear Investor, On Monday, the S&P 500 popped 2.65%. Another round of investors have bet that recent lows of 3,500 will be the short-term bottom. Institutions and retail investors alike both widely agree that the worst is not over for the Index. Let’s take a look at the rationale. Could SPY Hit 400 by October 28? Morgan Stanley is betting on another Bear Market rally similar to our run from July 19 to mid-August. Dubbed the “Inflation Bull Trap,” the rally could pop to 4,000 before retreating to new lows on the year. "From our vantage point, inflation has peaked," Morgan Stanley equity strategist Mike Wilson wrote. "8% is hardly a rate the Fed can live with but if you look out 6 months, the seeds have been sown for lower prices in many goods and services." The pattern would likely rival the summer, low-volume rally that took the S&P 500 to its 200-day moving average before violently moving to lows in August and September. These bear rallies are common in drawn out market declines. The chart below from Michael Cramer shows the striking similarity between the market’s moves in 2008 compared to today. [Market Moves]( As you can see, heading into September - the pattern aligns closely. But is that enough to suggest a short-term rally and a further move down like Morgan Stanley suggests? Verdict: The markets will experience short-term pops like they did in 2001, 2008, 2018, 2020, and today. But the major difference between then and now is the Fed’s fight against inflation. Those periods didn’t complement a Consumer Price Index (CPI) north of 8%. In addition, I believe that the market is more likely to trade at a similar pattern to 2018 when the markets experienced their last round of higher interest rates. At the time, the S&P 500 chopped from September to November from yearly lows to the top of a technical channel. Finally, after the Fed moved rates higher and accelerated its bond sales, the S&P 500 dropped 19.8% in December 2018. Today, we’re looking for the S&P 500 to break above a vital 3,700 level, squeezing out short traders and helping to create a short-term rally. My target for the S&P 500 is about 3,850. I would be surprised if we moved above 4,000. Hey! You Said There’d Be Positive Energy There is positive energy. Positive momentum in the energy sector that is. Today, crude oil rebounded on increased optimism that China’s demand will return to the market. In addition, we saw a massive takeover deal that will alter the future of domestic energy in the United States. The Hamm family offered a deal to take Continental Resources (CLR) private. Shares popped nearly 8.7% on the news. This deal matters - as I expect it will be a catalyst for more dealmaking in the Texas oil industry. As I’ve noted, Warren Buffett has bought up shares of Occidental Petroleum (OXY) for months. There is rampant speculation that Berkshire Hathaway (BRK.B) could try to purchase the rest of the stock. According to various reports, Occidental is improving its financial condition, paying down debt, and moving toward investment grade. That move to investment grade could prompt a quick takeover. My price target for OXY is $92 per share in a deal. Meanwhile, Exxon Mobil (XOM) announced it has exited Russia once and for all. Reports indicate that Russia has expropriated its existing properties. Possible losses - including a stake in the nation’s largest oil-and-gas project - could total at least $4 billion. With that in mind, Exxon may not be looking to put some money to work in the U.S. energy business - particularly as we experience a rebalancing of supply and demand in the coming years. Attractive names to watch and trade include Devon Energy (DVN), Marathon Energy (MRO), ConocoPhillips (COP), and Permian Resources (PR). Enjoy your day, [Garrett signature] Garrett {NAME} [] Here's Some Positive Energy [Garrett Pic] Market momentum is Yellow. Markets pushed toward resistance again Monday, but peeled back on two occasions. With earnings season underway, capital is returning to the market. Tomorrow, we have two critical earnings reports from Goldman Sachs (GS) and Netflix (NFLX). Cash remains your ally while energy remains our only positive sector for active upside trading Dear Investor, On Monday, the S&P 500 popped 2.65%. Another round of investors have bet that recent lows of 3,500 will be the short-term bottom. Institutions and retail investors alike both widely agree that the worst is not over for the Index. Let’s take a look at the rationale. Could SPY Hit 400 by October 28? Morgan Stanley is betting on another Bear Market rally similar to our run from July 19 to mid-August. Dubbed the “Inflation Bull Trap,” the rally could pop to 4,000 before retreating to new lows on the year. "From our vantage point, inflation has peaked," Morgan Stanley equity strategist Mike Wilson wrote. "8% is hardly a rate the Fed can live with but if you look out 6 months, the seeds have been sown for lower prices in many goods and services." The pattern would likely rival the summer, low-volume rally that took the S&P 500 to its 200-day moving average before violently moving to lows in August and September. These bear rallies are common in drawn out market declines. The chart below from Michael Cramer shows the striking similarity between the market’s moves in 2008 compared to today. [Market Moves]( As you can see, heading into September - the pattern aligns closely. But is that enough to suggest a short-term rally and a further move down like Morgan Stanley suggests? Verdict: The markets will experience short-term pops like they did in 2001, 2008, 2018, 2020, and today. But the major difference between then and now is the Fed’s fight against inflation. Those periods didn’t complement a Consumer Price Index (CPI) north of 8%. In addition, I believe that the market is more likely to trade at a similar pattern to 2018 when the markets experienced their last round of higher interest rates. At the time, the S&P 500 chopped from September to November from yearly lows to the top of a technical channel. Finally, after the Fed moved rates higher and accelerated its bond sales, the S&P 500 dropped 19.8% in December 2018. Today, we’re looking for the S&P 500 to break above a vital 3,700 level, squeezing out short traders and helping to create a short-term rally. My target for the S&P 500 is about 3,850. I would be surprised if we moved above 4,000. Hey! You Said There’d Be Positive Energy There is positive energy. Positive momentum in the energy sector that is. Today, crude oil rebounded on increased optimism that China’s demand will return to the market. In addition, we saw a massive takeover deal that will alter the future of domestic energy in the United States. The Hamm family offered a deal to take Continental Resources (CLR) private. Shares popped nearly 8.7% on the news. This deal matters - as I expect it will be a catalyst for more dealmaking in the Texas oil industry. As I’ve noted, Warren Buffett has bought up shares of Occidental Petroleum (OXY) for months. There is rampant speculation that Berkshire Hathaway (BRK.B) could try to purchase the rest of the stock. According to various reports, Occidental is improving its financial condition, paying down debt, and moving toward investment grade. That move to investment grade could prompt a quick takeover. My price target for OXY is $92 per share in a deal. Meanwhile, Exxon Mobil (XOM) announced it has exited Russia once and for all. Reports indicate that Russia has expropriated its existing properties. Possible losses - including a stake in the nation’s largest oil-and-gas project - could total at least $4 billion. With that in mind, Exxon may not be looking to put some money to work in the U.S. energy business - particularly as we experience a rebalancing of supply and demand in the coming years. Attractive names to watch and trade include Devon Energy (DVN), Marathon Energy (MRO), ConocoPhillips (COP), and Permian Resources (PR). Enjoy your day, [Garrett signature] Garrett {NAME} [] © 2022 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of GFP’s communications should be considered or used as personalized investment advice. GFP recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: GFP communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information please visit [our disclaimer page here](. [] Sent to: {EMAIL} [UNSUBSCRIBE]( [] © 2022 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of GFP’s communications should be considered or used as personalized investment advice. GFP recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: GFP communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information please visit [our disclaimer page here](. 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