Monday, March 06, 2006

Slick Top!

Our model tells us that we just saw a top in Oil. June contract reversed at 66 and our bet is, it's not going anywhere above it.

It's a big statement, I know.

At this time we're selling call verticals and looking to buy lower OTM calls after the leg takes us lower. No, I don't think it's Armageddon in the Oil market. In fact I still think that while we saw the top and we are ways off from the bottom, the action that gets us there will be volatile. If you're ready to hit the market like we are then play both ways with a negative bias.

If it sounds like I am talking from both sides of my mouth, I am. But recognize that I am an Oil bear and I will sell rallies and buy blowoffs - all while staying a bear. You want to trade the S&P and the Nasdaq? Fine, but as far as I am concerned Oil is THE market.

Get in there and trade it.



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