Hurricane Gustav came in this weekend and did nothing compared to what Katrina did three years ago. The region prepared for the worst, which is better than they did back then. With all the rain that came in, oil took a bath. At the start of the day oil was down as much as $8 and as I type this post oil is sitting at $108.50.

It’s being said that with everyone looking at what the storms could do to the price of oil that they’re not looking at the fact that OPEC will be meeting on September 9th as well as that there are no sanction being put on Russia in regards to the Georgia conflict. One trader that was interviewed on CNBC stated that this is a good buying opportunity (I beg to differ).

last week I built a position in stocks that leaned toward having oil go up in price. My thinking was that if Gustav came in and hit the region harder that what it did, the price of oil would have gone up. Unfortunately it didn’t go that way and I’m getting hammered today with those stocks. One of those stocks was Cabot Oil & Gas Inc. which is presently down 8% and the other is XTO Energy Inc. down almost 9%.

.

Watching the markets you can see that the airlines are doing great today because of the drop in oil prices. United airlines (UAL) and Delta are up over 16% as of 12:00. The rest of the sector is just about up 10% as well. If you were one of the traders that bet against the storm doing damage and invested in the airline sector you’re doing great so far today. I do believe that price of oil will come down more by the end of the month (maybe somewhere near $100) and I will be looking for dips in certain stocks that would gain strength on those numbers.

.

As for the financial sector, it’s up again today with news coming out on many different levels. I said last week that I would be building a postion in one or more stocks from this sector. Lehman Brothers was one of those stocks that I jumped into and the other was Goldman Sachs. In the last three trading days I’m up 14% and 8% respectfully.

Day like this are the days that I like to see. If you look at the Retail sector you can see that this economy is stronger than what the bears want us to believe.

Related posts

• The Stock Market Is Getting Ready For Another Run Up (0)
• The Stimulus Plan Doesn’t Stimulate Anything (0)
• Not Another Manic Monday (0)
• Injection For The Financial Sector (0)
• Financials, Oil And Commodities, Oh My. (0)