By Tim Knight
Welcome to a new week, everyone. First off, unrelated to anything, I’ve just got to see that this story about how California’s high-speed rail is going way over budget (tens of billions) and is going to be many years late is the least-surprising thing I’ve ever witnessed. California came up with this thing in the throes of the financial crisis, I guess as a changey-hopey way to convince citizens they were forward-thinking, but I immediately concluded it would be an utter debacle.
For those unfamiliar with it, the idea is basically to retrofit existing tracks, as well as build new ones, to create a sorta-kinda “high” speed train between San Francisco and, frankly, Disneyland (portrayed as “Anaheim”). This is not going to be anything like those amazing multi-hundred MPH beauties from Japan or China. No, in the end, it’s going to be an incredibly expensive, incredibly late, slightly-modernized train which they’ll probably wind up driving at 80 mph or so. My dire prediction seems to be right on target so far.
I just wanted to point out, away from the din of soaring equity prices, that oil seems to be rolling over (again). Please take note of the interesting pattern I’ve tinted in green. My view is that it’s going to be a repeat of the prior top, shown in grey.
Looking closer, you can see the sine wave-like pattern that’s been forming for months now. The red arrow is, shall we say, conjectural.
As for how to play this, I’m fond of the oil & gas exploration and production fund, symbol XOP. It seems to be a break of that symmetric triangle is altogether likely.