Oil's Biggest 3-Day Drop In 5 years
Oil prices fell below $130 a barrel for the first time in more than a month Thursday, as the dramatic slide entered its third day along with a sharp sell-off in natural gas.
We first posed this question on Wednesday – but it's so poignant we're asking again. As global demand for oil slows, supply should build. Does that mean the energy bull run is done?
Possibly, according to Addison Armstrong, Tradition Energy Director Of Market Research.
"We’re seeing liquidation pure and simple," he says on Fast Money, “which is being driven by the weak balance sheets of the banks. They’ve been cleaning them up by raising cash and they’re doing that by selling oil and other commodities.”
That suggests at least some investors are selling crude contracts even though they really don't want to be sellers.
"It’s really become a cascading trade," Armstrong adds. "We have to watch the technicals now. If we break through $125 we could see $117 next week."
I got out today, reveals Jeff Macke. The uptrend is broken now for the near-term.
Stay on the sidelines on Friday when Schlumberger reports, counsels Guy Adami, and that should tell you how to trade Baker Hughesand Halliburton ahead of their earnings.
Also, I’d buy Exxon Mobil and ConocoPhillips on this news, he says.
> SPECIAL REPORT: Oil Reversal May Be ImminentLearn why Steve Cortes, founder of Veracruz Research, thinks energy is due for a sharp turnaround.
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Trader disclosure: On July 17, 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 (WMT), (GS), (MSFT), (HAS); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (AAPL), (CHK), (TSO), (XLF); Najarian Owns (ANR) Puts; Najarian Owns (CSCO) Calls, (MER) Calls, (SLB) Calls, (YHOO) Calls, (UYG) Calls; Finerman Owns (GS); Finerman's Firm Owns (MSFT), (NOK), (TSO), (SUN), (VLO), (AXP), (MRK), (PM); Finerman's Firm Is Long SPX Index puts; Finerman's Firm And Finerman Own (C) And (C) Leaps; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM)
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Armstrong Owns (GLD), (COMV)