The call to short the bugger at US139 now looks really good. As I am posting this Nymex Oil is at US123. Assuming I am holding the short position at US139, what do I do now? Take profit? Let it ride? For reasons why I called for the big shorting, please reread my posting a few weeks back (June 8, 2008). The reasons are still valid.
Suddenly now you don't hear about oil supply being unable to meet growth in demand. Why suddenly so quiet? This is an important lesson, the media and market pundits pander to try to explain the trend and take the current price as "god-given correct prices". Hence truth is exaggerated at any point in time, if there is truth at all. Now its demand destruction to the forefront.
If I shorted at US139, I'd be pretty happy to ride along as I am waiting for US120 to be broken, which to me, will be a very huge sell signal to most chartists. At US119.90 I would be doubling up my short position. Why don't I double up now at US123 you might ask. Well, things are still fluid, it could hang around the present levels for another few weeks, which to me would be base building - if it does that, and does not break US120 by mid-August, then I should take profit on my short position as I would interpret that as the bulls still having the upper hand.
Hence I am looking forward eagerly to US120 being broken because it will fall pretty quickly to US105-110, the level which I think there will be better long term support. Once it breaks US120, that is considered as pretty positive for equities in general and should move all markets up by 4%-5%.
p/s photos: Porntip Wongkijjanon