Crude oil traded above $100 a barrel Wednesday for the first time ever.
Will it keep moving higher, or has the rally run out of fuel?
On a one year basis crude is up 60%. I think crude will meet up with sellers at this level says Oppenheimer Chief Market Technician, Carter Worth
However, year over year energy is only 30% higher and worth a look. I like big integrated such as Exxon , Conoco (COP) and Chevron (CVX). Technical analysis suggests that they are in a position to break out and move higher. Also I think they’re “cheap” on a valuation basis.
On the other hand, the refiners don’t look so good to me, Worth adds. I’d avoid Valero , Sunoco (SUN) and Tesoro (TSO).
What does Wednesday’s market action suggest to you?
I think we’re in a bear market - in financials, as well as consumer discretionary, and real estate. And now tech could be starting to unravel.
How do you play it?
Short S&P and long energy. Or long energy names and short crude.
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Trader disclosure: On Jan 2, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (INTC), (DIS); Jon Najarian Owns (AGU), (CSIQ), (AMZN), (BG), (DE), (DPTR), (GFI), (GS), (GT), (MON), (MOS), (MRO), (POT), (TSO), (UBS), (VLO), (CME), (GM),(UA); Jon Najarian Is Short (KLAC); Seymour Owns (CSCO), (INTC), (BX); Seygem Asset Management Owns (EWT), (TSM), (X), (PKX)