IMO, some of the most supportive evidence for a bubble, is almost everyone thinks it is going higher. DS
http://www.amazon.com/exec/obidos/tg/detail/-/081797962X/103-2649106-6989463?v=glance doomsday myth alert.
I also believe in markets so it is what it is; however, I would not be surprised to see the price fall towards 40. It seems the mkt is now reacting negatively to any news, for example oil jumped on June 1 for apparently no reason other than it marked the start of hurricane season. DS ps-I wish I knew how to trade bubbles but they seem to last longer than you might otherwise expect. Good trading to you.
On of a good sign for a bubble (provided that the market is liquid) is huge volatility. Oil was high to mid 40s couple of weeks ago. âFair priceâ in such environment is a elusive concept.
I recently read an article wherein the oil industry was complaining about the current high production costs. Rig lease costs doubled, labor shortages and higher wages, etc, etc...and they say it now costs on average over $17/barrel to produce oil!! Wake up and smell the oil...you have a profit margin grocery stores(and maybe even Wal-Mart) would die for.
Some interesting stats that suggest to me we are in a bubble mentality: 1. (anecdotal)-I hear "water cooler" talk from people wanting to "get in" on the high prices to make money. 2. Year over year, gasoline inventories are up, but so is use. 3. Crude inventories are up almost 10% year over year. 4. U.S. crude production is up year over year-to me that suggests an all out effort by suppliers to increase production, something that is likely happening all around the globe. But, a bubble is a bubble and they have a life of their own, so who knows when it busts, if ever. DS
here is where i am not following you... you say we should be trading around 40... lets say 43 just for kicks. we are at 59 right now and were around 53-54 early last week.... anway if we went from 59 to 43 that would be a drop of 27%. when i think of a bubble i would need to see about twice that to call it a bubble. right now i would say we are over bought... but i personally think geopolitical reasons are driving this rally and things could change extremely fast.
Not everybody. According to the Washington Service, insiders in the energy sector sold more than in any other S&P 500 sector last week. There were no buys and $76,200,943 in sells.