When everyone agrees on something, I tend to get suspicious. Oil at 70 a slam dunk? Maybe. But today is the first in six that we close below the 5 day moving average, indicating a slight loss of momentum. We could conceivably see a test of 67.65 soon. Some analyst believe all the bad news, including a disruption from Iran, is priced in and we have ample inventories to deal with it. Others (mostly oil brokerages) are screaming 75 in a week. We will just look at the chart and see what happens at 5 dma, 68.40. If oil bulls can't get that level back, you know mid-67 is right around the corner. Whether or not that constitutes a minor pullback or the start of a real correction, that is not for us to decide. We trade charts, not emotions.
This entry was posted
on Wednesday, April 12, 2006 at 8:05 PM.
