posted Sep 28, 2004 at 12:02AM
One can grow old trying to call tops on strongly trending markets. And yet the contrarian spidey senses are tingling?
When people can't imagine how a market can do anything but go up... it usually goes down...the whole principle of everyone being on the same side of the trade here eventually taking its toll.
From a TA perosective only, we have oil gapping up after a very long and strong rise...giving rise to a potential bull exhaustion move. It is close to the upper end of the channel and buying pressure is at peak levels.
However markets like this usually need some kind of "catalyst" before doing some kind of reversal.
Remember for gold it was dual whammy of the Fed announcing rate hikes and China talking about economic cooling that initiated the deep correction.
It will take something similar to stop the oil juggernaut, but history shows these catalysts always come, even if out of the blue, so one should keep one's ear low to the ground.
(let me go out on a big big limb and say it will be something like a confirmation that China has been hoarding oil and there is suddenly this large supply overhang on the market)