As we pointed out on our October 1, 2020: "The Bear Growls - Quarter Ends Bring Trading Opportunities" there is a ”window dressing” effect at the close of quarters and fiscal years, and that “Many great trading and investing opportunities occur when the “baby is thrown out with the bathwater”. In addition, we pointed to a potential strategy, where “As traders, we can view the overall market of stocks in the fashion of a bell curve over a specified time. In a reversion to the mean strategy, one looks to trade in the best and worst performers, looking to buy fundamentally cheap stocks and sell fundamentally overpriced momentum stocks going into and following the quarter and/or year-end.” We noted as well that “October 31st is the end of the fiscal year for many mutual funds, so going into the end of the month here in October is an important time period.” As of this writing, the worst-performing sector S&P 500 Oil & Gas Exploration (as of October 31, which was the end of the mutual fund fiscal year) has been the stellar outperformer since then, now up a gargantuan 50.41% in a month’s time. On October 31, Occidental Petroleum (OXY) was down 77% on the year, the worst of any company in the S&P 500. As of this writing (Tuesday, Nov. 24), the shares are up a whopping 86%. Other names in the energy space have posted outsized gains Diamondback (FANG) is up 78%, and Devon Energy (DVN) is up 70%. Such outsized returns for out of favor stocks do not always happen in this strategy, but the key ingredients were present for an explosive move, 1) extremely bearish price action into the end of the mutual fund fiscal year 10/31, 2) extremely bearish news flow on the sector and its existential abilities to survive a future low/no carbon world, and finally, 3) an extended period of investor pessimism on the sector. As traders and investors, it takes a lot of intestinal fortitude to go against the crowd, but it can be quite rewarding given proper timing and market sentiment. Readers of the Bear Growls were alerted and watching the calendar! Happy Thanksgiving to all!

The content of this message and its attachments are intended only for the informational and educational use for the intended recipient and may contain confidential and privileged information. If you are not the intended recipient, any dissemination, distribution, or copying of this message or its attachments is prohibited. If you received this message in error, please notify the sender by replying to this email immediately and delete this message and its attachments from your computer. The information provided by TradeZero America, Inc. is solely for educational and informational purposes. None of the information should be understood, construed or inferred to be an offer or solicitation of an offer, or a recommendation, to buy, sell, or hold any security or financial product, or engage in any particular investment strategy. This message is also not an offer to provide advisory or other services by TradeZero America, Inc. All communications sent to or from TradeZero America, Inc. are subject to archive and review by TradeZero America, Inc. and by regulatory and law enforcement authorities. We explicitly disclaim all liability for any action taken based on any information contained in this writing.