Now the dollar’s quite crucial to this.
If it does rally from here then oil is almost
definitely going lower regardless.
If the dollar stabilizes, well then crude
oil is really at the mercy of the supply and
demand dynamics we’ve talked about.
But if the dollar falls then it’s going to
be difficult for oil to fall, it’s most likely
So the dollar is a key part of the equation.
To sum it all up I think there’s a really
great opportunity here on the short side,
what’s also good about this is there’s a stop
loss at that previous high that the market’s
kind of tested several times and never really
That’s above $55, let’s call it $57 a barrel.
So we’ve got a tight stop loss, in long term
chart perspective, and an opportunity at the
Options in crude oil are not that expensive
either so you can protect your downside because
futures trading in oil can get quite risky,
you know, if something happens in Iran or
Iraq suddenly the oil price shoots up.
I also like trading those stocks, and I think
you could buy long-term downside options on
Exxon or on the SXEP, or look up your own
ways of reflecting this trade.
So I think there are opportunities, you can
find a number of ways of expressing this view.
Keep your eye on the dollar when this is happening
and also keep your eye on that top price in
If it breaks above that I’d suggest that something’s
changed again and we need to re-assess.