PabstPrime wrote: I agree with the OP. I hear a zillion people a day say "bubble", "when it goes to 85", "true value is 70" ect. I LIVE to short runaway bulls. I won't even consider shorting CL until I see less bearish sentiment. As a tape reader it's clear to me new shorts pile in on every $2 decline and find no commercial selling in back of them to cover into. Manipulated, over speculative markets don't grind higher they explode higher. This stuff still has a ways to go before it punishes enough shorts so that it can finally top. ........................................................................................... In other words you are looking for extreme parabolic tops no matter what the item, and it either has this characteristic or it does not.
It's easier said than done, that's for sure - but I'm working on it In pretty much every major (as opposed to minor) bull or bear market I've see, there is capitulation and a sentiment extreme, usually along with a major parabolic move, before the ultimate top or bottom occurs. There are a few exceptions such as stocks in 2007 - there the trigger was a major fundamental shift - but one could also argue the top took a good 6 months to form. You can get unannounced corrections, such as the move from $135 to $121 a few weeks ago, but the ultimate top seems to have this extreme of price momentum, sentiment, and panic buying/short-covering (or selling/margin calls for a bear). Certainly we don't yet have the oil equivalent of a sub-prime bust in fundamental terms, so I think the capitulation method is the way this will top out. Now I would be the first to admit that identifying this is not an exact science, but I think it provides a reasonable guide - better than any other indicator I am aware of.
some moves are real... and some moves are not. to compare oil run with a dot.com bubble is like comparing porsche with GM...
I think one thing we should keep in mind is that oil is a commodity and its therefore different from equities. When it does break the market will head down vertically.
That is until margins are raised and it becomes a "liquidation-only" type market like the COMEX did to the Hunt Brothers back in 1980. Throw in a few interest rate hikes by Volcker, and it was all over but the crying. Remember, as of the end of Q1 of this year, $70 BILLION of pension fund assets were "invested" in the energy futures markets. Let me repeat: PENSION FUND ASSETS! There are some people in Congress that have a BIG problem with that. Govt. changed the rules once before. They can surely do it again.
When you've improved your trading skills and experience in a few years, you'll understand my comparison.
well, what should I say to comment like this? maybe... one thing that does not change is ET members' class!