11-29-2014, 01:16 PM
We are definitely going to see some bargains in the oil patch, but I caution against buying just yet. Yesterday the midstream MLPs got clobbered. Look at a chart of MLPI, which is an easy way to follow the Alerian MLP Infrastructure Index (AMZI). This is a group that is mostly or entirely immune to changes in WTI pricing. Does the selloff make sense? I think we are seeing the start of panic selling. The selling could challenge the panic that happened in October. It could easily go down another 10%.
If the midstream MLPs are being hit by panic selling, the E&P companies are going to get it even worse. Look at a long term chart of CVX. Yesterday's big selloff is just the start, IMO. It could easily go down to 90, another 20%.
I want to start a position in CVX but it is way too soon for me. I am also waiting for the AMZI to get cheaper so I can buy some midstreamers. Way too seen there as well.
This article has a detailed look at what has happened and cautions against jumping in just yet: http://seekingalpha.com/article/2716985-...t-44027425
If the midstream MLPs are being hit by panic selling, the E&P companies are going to get it even worse. Look at a long term chart of CVX. Yesterday's big selloff is just the start, IMO. It could easily go down to 90, another 20%.
I want to start a position in CVX but it is way too soon for me. I am also waiting for the AMZI to get cheaper so I can buy some midstreamers. Way too seen there as well.
This article has a detailed look at what has happened and cautions against jumping in just yet: http://seekingalpha.com/article/2716985-...t-44027425