Thursday, March 30

Today the Financial sector reversed some of their losses today as treasury yields increased somewhat. Crude continued to rally, but was somewhat dulled by gains in the US dollar driving off foreign investors. Relatedly Chesapeake Energy (CHK) has yet to fall after gaining almost 8% on Wednesday, contrary to our predictions for the day. We still believe they are a short candidate, but potentially over a somewhat longer period that we had initially anticipated.

For our portfolio a continued rally in the energy sector will bring our holdings in XLE back in line with our initial projections for that investment, as it has been underperforming the S&P 500 for most of March. We don’t yet see a strong consensus on crude prices into 2018 and 2019, but believe that somewhere north of $60/barrel is the most likely outcome.

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