The chatter yesterday afternoon reflected that the prospects of an OPEC deal were about 50/50. Yet the day’s price action in crude and energy shares reflected less sanguine sentiments. Here’s a chart of the Energy Select Sector SPDR(XLE) over the previous five days.

Reading the psychology underlying the price action, XLE has participated in the broad-based rally (that’s bullish) but declined after Thanksgiving. Yesterday the selling intensified with XLE down 1.2% while the United States Oil ETF(USO) plunged 3.6%.

That’s the kind of pattern that can be really advantageous in a situation where there’s underlying demand yet investors are fearful of an event. When the bad outcome is mostly priced in, you get a situation where you can lose a little (if the bad outcome becomes reality) or make a lot (if something good happens).

Yesterday ConocoPhillips(COP) was sold pretty heavily and declined nearly 3%. I looked into how COP fares after daily dips of more than 1.5% since 2013. Here’s a table with those statistics:

There’s no evidence of a mean reversion play in COP. It tends to be a coin toss with a lot of volatility (risk).

Today energy shares are rallying strongly after OPEC announced a production cut. COP is up over 9% as I write. Today isn’t the day to initiate fresh positions but the big winners in this may be the low-cost shale producers such as Apache(APA) and EOG Resources (EOG) .

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