May 22, 2008
The markets didn’t give us the dead cat bounce like were expecting, nonetheless, they managed to find some buying interest today as the indices finished slightly up on the day. Oil was down (for once) and as we said in our prior post, oil is starting to show the symptoms of being the latest bubble waiting to burst. Despite what the pundits are currently saying and how bleak the future might be, oil cannot go up forever. The crowd is now jumping into the fray and when that happens the money that could have been made has already been done, and when the masses enter the picture they are fighting amongst themselves for the crumbs, while the ‘smart-money’ left the dinner table long before. We’re not saying a top has arrived, we are simply stating that it will top eventually and when it does it will be when the crowd gets in because their stock broker gave them a “hot” tip on how to rally from the run while, he, the broker, is liquating his positions in that same stock. Or perhaps a co-worker of theirs tells them about a oil stock that they tripled their money in, so they will go out and get it too – only at the top. It’s like clock work – happened in the late 90’s when everyone was quitting their day-jobs to become day-traders, and once again recently when everyone was quitting their job to become real estate investors and realtors. When this happens, there is usually imminent doom. We think oil is getting heavy in the same manner, but have yet to really see that same comparable fervor. But trust us it will come.
Here’s the NASDAQ and S&P Charts…
