USO has my attention.
Hi USO, How are you?
If you know my trading style, you know I am a quant trader and I am now in the process of developing a working model of USO. But while USO and I get acquainted, intimately ;), I wanted to speak philosophically about the idea of an ETF based on oil and just about the energy sector as a whole.
I had frequently posted in XOM and one thing I had noticed was that XOM finally was able to break out of essentially a 7 to 8 ish year downtrend. The oil based energy sector as a whole has seen this kind of prolonged downtrend, with USO being no different, as evidenced by this monthly candlestick chart. At its zenith, USO was trading slightly over $950.
It has only been hemorrhaging money since its peak, as has all oil based energy companies. In fact, it has been a terrible ETF that causes investors to slowly ooze their money and not stably grow their investments as with any other ETF. In fact, energy and oil has been trading inversely that of green energy stocks. For example, if we look at NextEra energy (NYSE: NEE) below, we will see, as oil and energy stocks decline, NEE increased:
Green energy ETFs are kind of novel and haven't been around long enough to truly compare with USO, but they have equally been performing terribly. Let's take a look at some.
Here is ICLN, a green energy ETF
You will notice here, that inverse relationship as pointed by the yellow arrow. As oil and non-renewable energy grows, green declines. And the inverse is true, as Oil prices declines, green energy rises.
So what gives?
This is where the philosophically/politically charged nature of these ETFs come in. Which is better? Dirty, antiquated, polluting oil stocks? Or clean, natural resource intensive and toxic byproduct producing green energy like solar and wind?
In all honesty, I truly believe it comes down to politics. Oil and "dirty" energy producing stocks fell out of fashion with the pro-enviornment movement and emphasis on renewable energy sources. This has led to an under performance of oil stocks (in my opinion) and an over-performance of green energy stocks.
In this great correction we are seeing in 2022, what we are in fact witnessing is the rightful correction of stocks back to natural states. Oil does not deserve to be at this price, IMO. No matter where you stand on the dirty vs clean energy debate, oil continues to be pivotal for society.
Green energy is equally pivotal. We need both. We cannot rely completely on one source of energy.
I believe we are seeing a massive correction in both industries where these stocks are returning to their rightful price. I do believe oil will continue to rise. We need pull backs of course, we can't just go straight up, but the fact is, oil remains a pivotal part of society.
Green energy is also pivotal and I believe that once we see stabilization in these stocks, we hopefully can understand that both industries are pivotal for societal and economic growth.
Sadly, both green energy and oil stocks have been tarnished by politics. Politics has a funny habit of ruining things. From the times of the liberal free 80s and 90s where anything went and, who really cares?! To now, where everything must be categorized, studied, labelled and discussed, from our personal identities and now to our investment choices.
But I still hold out hope for USO! And also for clean energy. I have avoided investing in either or (with the exception of XOM) because of the political stigma's surrounding them and the fact that those stigmas have translated to unnatural growth and decline. But I see things are turning around and I will be the first to jump on that band wagon to re-join!
Disclaimer!
Not investment advice!
I am PRO green energy, even in the process of buying an electric car (which I understand really are not environmentally friendly haha); but I recognize the need for both energy sources and investment in both fields!
Hi USO, How are you?
If you know my trading style, you know I am a quant trader and I am now in the process of developing a working model of USO. But while USO and I get acquainted, intimately ;), I wanted to speak philosophically about the idea of an ETF based on oil and just about the energy sector as a whole.
I had frequently posted in XOM and one thing I had noticed was that XOM finally was able to break out of essentially a 7 to 8 ish year downtrend. The oil based energy sector as a whole has seen this kind of prolonged downtrend, with USO being no different, as evidenced by this monthly candlestick chart. At its zenith, USO was trading slightly over $950.
It has only been hemorrhaging money since its peak, as has all oil based energy companies. In fact, it has been a terrible ETF that causes investors to slowly ooze their money and not stably grow their investments as with any other ETF. In fact, energy and oil has been trading inversely that of green energy stocks. For example, if we look at NextEra energy (NYSE: NEE) below, we will see, as oil and energy stocks decline, NEE increased:
Green energy ETFs are kind of novel and haven't been around long enough to truly compare with USO, but they have equally been performing terribly. Let's take a look at some.
Here is ICLN, a green energy ETF
You will notice here, that inverse relationship as pointed by the yellow arrow. As oil and non-renewable energy grows, green declines. And the inverse is true, as Oil prices declines, green energy rises.
So what gives?
This is where the philosophically/politically charged nature of these ETFs come in. Which is better? Dirty, antiquated, polluting oil stocks? Or clean, natural resource intensive and toxic byproduct producing green energy like solar and wind?
In all honesty, I truly believe it comes down to politics. Oil and "dirty" energy producing stocks fell out of fashion with the pro-enviornment movement and emphasis on renewable energy sources. This has led to an under performance of oil stocks (in my opinion) and an over-performance of green energy stocks.
In this great correction we are seeing in 2022, what we are in fact witnessing is the rightful correction of stocks back to natural states. Oil does not deserve to be at this price, IMO. No matter where you stand on the dirty vs clean energy debate, oil continues to be pivotal for society.
Green energy is equally pivotal. We need both. We cannot rely completely on one source of energy.
I believe we are seeing a massive correction in both industries where these stocks are returning to their rightful price. I do believe oil will continue to rise. We need pull backs of course, we can't just go straight up, but the fact is, oil remains a pivotal part of society.
Green energy is also pivotal and I believe that once we see stabilization in these stocks, we hopefully can understand that both industries are pivotal for societal and economic growth.
Sadly, both green energy and oil stocks have been tarnished by politics. Politics has a funny habit of ruining things. From the times of the liberal free 80s and 90s where anything went and, who really cares?! To now, where everything must be categorized, studied, labelled and discussed, from our personal identities and now to our investment choices.
But I still hold out hope for USO! And also for clean energy. I have avoided investing in either or (with the exception of XOM) because of the political stigma's surrounding them and the fact that those stigmas have translated to unnatural growth and decline. But I see things are turning around and I will be the first to jump on that band wagon to re-join!
Disclaimer!
Not investment advice!
I am PRO green energy, even in the process of buying an electric car (which I understand really are not environmentally friendly haha); but I recognize the need for both energy sources and investment in both fields!
Get:
- Live Updates,
- Discord access,
- Access to my Proprietary Merlin Software,
- Access to premium indicators,
patreon.com/steversteves
Now on X!
- Live Updates,
- Discord access,
- Access to my Proprietary Merlin Software,
- Access to premium indicators,
patreon.com/steversteves
Now on X!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Get:
- Live Updates,
- Discord access,
- Access to my Proprietary Merlin Software,
- Access to premium indicators,
patreon.com/steversteves
Now on X!
- Live Updates,
- Discord access,
- Access to my Proprietary Merlin Software,
- Access to premium indicators,
patreon.com/steversteves
Now on X!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.