Monday, April 21, 2008

riding the commodity bubble

The commodity market has been the new "growth" point after all the turmoils in the financial sector.
Among the EFT funds, USO alone has risen 15% since March.
The question is, when do I cash out?

In the long run, USO will still rise, but it seems to have reached a short-term correction zone. There is clearly a bubble in the oil price. What message would burst the bubble and send it down-hill? Maybe another OPEC meeting? Maybe a senator bill to raise the tax at the pump. (Just find that John MacCain had a bill to suspend gas tax this summer, which will only increase demand and thus increase oil price.)
Closely tracking the price, I can feel the fear factor: there is always a wave of cash-out in after-hour trading that send the price down for the next-day's opening. Low and behold, the price will climb up again and reach new high during the next day's day-trading.

It's always tricky to time the market, even if you know the trend.

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