Oil Stocks Down; Covering Some Shorts

About 3 weeks ago I mentioned it might be time to sell some oil stocks, and/or short them. But not all at once, which was a good thing, since prices rose after that.

Oil prices, and oil stocks, are down sharply today because of the peace efforts in the Middle East. I'm hearing that XLE (the commonly traded energy ETF) is close to its short-term target and has a good chance of rising again before continuing further down.

Moreover, the next 2-3 weeks tend to be a seasonally positive period for the stock markets, on average.

So if you shorted some during the higher prices, today looks like an opportune time to cover some of those shorts and take some profits, if you're a short-term trader. Or for long-term investors, you might want to buy some more oil stocks now. But remember we still could go lower, especially after summer driving (and hurricane season) is over.

Of course nothing is certain, but basically in the upcoming weeks to months, you should be prepared for about a 10% decline in oil prices (maybe to $65 a barrel in the futures market, give or take), and a similar decline in oil company stocks also. But in the upcoming years, you should also be prepared for oil at $100 a barrel. Goldman Sachs predicted $105, and they have a reputation for being right more than wrong.