Thursday, September 29, 2005

BCA Research - Independent Investment Research Since 1949

BCA Research put out a sell recommendation on crude oil yesterday. The posted chart shows the spike in oil prices and the extremely high bullish sentiment.

The story is an old one, if everyone else is buying, you want to be selling. The BCA article suggests that consumer spending is set to drop.

As another piece of annecdotal evidence, I just received a call from a time share owner who wants to rent next week at Myrtle Beach. Consumers are changing their plans. More will stay home rather than pay $3 per gallon.

December gas futures are trading 20 cents lower than November futures. The market anticipates that refineries will be catching up by December. January and February gasoline demand is low. Normal spreads between crude and gas will prevail by January.