Tuesday, September 26, 2006
Quick Alert: Oil Bouncing
Have we come to a point where in order to have a rally, we must see oil down?
If so, then we are likely to endure extreme volatility over the next few months. I do not believe the oil story is dead, unlike everyone on CNBC. To believe that oil is going down to $50 or lower and the market is going to blast off to new high's because everyone is so fucking happy is folly.
Right now, everyone is pricing in a dramatic decrease in oil. What if that doesn't happen? What if this recent decline is temporary and oil heads back to $75, then what?
Answer: The market gets hammered, oil stocks go up.
So, for now, I will stubbornly hold my shorts and consider adding to VLO, as the technicals improve.
So I'm torn. Unwind shorts, or double down on today's strength?
What's your read?
My read on oil is murky too.
However, if I were short I would cover for fear of a squeeze.
PGWC goes down 25% on CEO/Board's voluntary delisting from Nasdaq and the crowd, quite long by their comments, loves it. That aside, something's not tr w/ this company. They took a massive beating, zero bounce.
It may not be wise to hold short too much longer.
I share your thoughts. However,markets on not rational and could keep going up, despite logic.
I am not suggesting to cover your shorts, but maybe adding a few longs in the mix, just in case, makes some sense.
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