ManyPeaks.com

Using history as a guide, this spike in Oil prices will likely not burst while so many people — frustrated from previously wrong calls of a top at $80, $90, $100, etc — continue calling it a “bubble.”

The absolute peaks of moves like this typically aren’t reached until even the bubble-callers give up, get quiet, and (silently?) buy into the trend itself. Only then does the move end. Markets are truly perverse like that.

With such pervasive bubble-talk, Teewinot thinks it’s foolish to call the top in Oil here. We are actively pursuing energy names such as Ensco (ESV), Varco (NOV), and Frontier (FTO). BPT and PBT are royalty trusts that also sit prominently on our radar screen.

If we’re wrong.. small losses are the worst outcome.. since we’re buying into multi-day pullbacks, and are willing to cut ties on any meaningful price failures. These are definitely odds that we like.

Everyone thinks oil is in bubble territory. It’s easy to agree. But for just that reason.. for now.. we must remain biased toward the upside in this sector.