Have you been piling into oil with the rest of the hot money? Might want to think about covering…or even reversing…your position.
The fact that oil didn’t leap up with delight at riots in Iran should make oil investors quake with fear. Iran produces about 5% of the world’s oil every day. Its populace is rioting… and yet the price of oil fell 3%.
As my colleague Brian Hunt pointed out, it’s a big bearish sign when an asset cannot rally on bullish news. We could see oil prices go into decline any minute.
Since breaking the $70 mark, oil has looked a bit toppy. News that China has stockpiled more oil than it can handle appears to have given investors pause.
Oil may be running out of breath after a huge run-up. (Source: Barchart.com)
Now’s probably a good time to take some profits…and if you like to live dangerously, maybe even consider taking a small short position for a short-term trade.
PS – If you’re a fan of short-term trading, I’d suggest you check out Jeff Clark’s S&A Short Report. It’s pricey…but if you’re a serious trader, it’s really top notch insights and recommendations. And right now they are running a special 3-month trial deal.