Oil is Down, Oil is Up

The Asian and European trade had crude oil trading down to $126, and then the American trade moved it back up to $131.

There seems to be some "fear" in the market that the bull oil run may be close to over. Then the commodity bulls state that the run has just started.

RBC Capital Markets was comparing the oil run to the tech bubble that ended in 2000. That seems like an odd comparison to me as there is one significant difference in these two markets.

Companies can keeps issuing stock forever, oil is finite. So the old "it’s different this time" axiom may have a chance of holding true this time.

The bottom line for crude in the long term is not going to be determined by speculators, it will ultimately be priced based on supply and demand.

Price will eventually limit demand, and if demand falls enough for oil inventories to rise dramatically the price will fall.

I think.

The trading today was difficult as the price action was nervous. Meaning, price was jumping multiple ticks at a time and required either a large stop or a lot of patience.

I prefer patience rather than large stops.

It takes some experience to not get mesmerized by your technical indicators and take all the signals no matter what.

If price is jumping all over the DOM and just does not look like "normal" price action you are probably better off to stay out of the market.

Oil is Down (click on chart to view)

Oil is Up