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.
As global demand for oil slows, supply should build. Does that mean the energy bull has run its course?
Basically, yes, according to Steve Cortes, founder of Veracruz Research.
“The energy trade has really been sold to the investing world as a play on emerging markets due to supposedly insatiable demand for crude and other resources from Asia," Cortes tells Fast Money.
"But India and China and other Asian markets are trading disastrously; down nearly 50% for the year. In my view that story doesn't hold water any longer!”
In other words, from '02 - '07 emerging markets traded in tandem with the energy sector. But in the beginning of this year emerging markets broke down while energy traded higher. Cortes expects the two are now aligning themselves again, with energy going lower.
And he’s putting his money where his mouth is.