Bear Market

The Big Short In Energy Looks Super Timely

One of the biggest stories of 2020, and one that will go down in history, is the total price collapse of crude oil and the subsequent spike in oil prices that followed.

It was on April 20 that WTI crude plunged into negative territory, bottoming out at -$37.63 per barrel. As of last Friday’s close, WTI had rallied all the way back up to $31.84/bbl.

The turnaround marked an amazing feat that was juiced by widespread production cuts and massive short covering. I see this snapback rally as an incredibly good opportunity to short crude and the energy sector as a whole.

The global demand for oil, largely due to China’s contracting economy, is slowing. Saudi Arabia’s and Russia’s unwillingness to cut back production in late March triggered the gradual selling pressure that culminated with the waterfall whoosh lower in mid-April.

The base case for shorting the energy patch is three-fold. First, the world is awash in crude oil. As a result, Russia, OPEC and non-OPEC nations will ultimately cheat on quotas to survive economically. Secondly, the global demand for oil is waning as renewable energy is making dramatic progress in replacing fossil fuels. And thirdly, a growing number of pension funds, mutual funds, hedge funds and retail investors will no longer own shares in carbon-generating companies.

Against the bearish backdrop, I’ve recommended that the subscribers of my Breakout Profits Alert trading service short the Energy Select Sector SPDR ETF (XLE) by buying Long Term Equity Anticipation Securities (LEAPS). The top 10 holdings in XLE make up 77.76% of total assets.

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I am looking for (and recommending) what I consider to be generational trades that have the potential to make 100%-500% gains per trade. Don’t miss out on this and other opportunities. There is a lot of money to be made with LEAPS, and I have the picks you need to cash in on this relatively little-known niche in investing.

Bryan Perry

For over a decade, Bryan Perry has brought his expertise on high-yielding investments to his Cash Machine subscribers. Before launching the Cash Machine advisory service, Bryan spent more than 20 years working as a financial adviser for major Wall Street firms, including Bear Stearns, Paine Webber and Lehman Brothers. Bryan co-hosted weekly financial news shows on the Bloomberg affiliate radio network from 1997 to 1999, and he’s frequently quoted by Forbes, Business Week and CBS’ MarketWatch. He often participates as a guest speaker on numerous investment forums and regional money shows around the nation. With over three decades of experience inside Wall Street, Bryan has proved himself to be an asset to subscribers who are looking to receive a juicy check in the mail each month, quarter or year. Bryan’s experience has given him a unique approach to high-yield investing: He combines his insights into dividend-paying investments with in-depth fundamental research in order to pick stocks with high dividend yields and potential capital appreciation. With his reputation for taking complex investment strategies and breaking them down to easy-to-understand advice for investors, Bryan also has several other services. His other services range from products that generate a juicy income flow to quick capital gains by using a variety of other strategies in his Premium Income Pro , Quick Income Trader, Breakout Profits Alert, Micro-Cap Stock Trader and Hi-Tech Trader services.