There seems to be a lot of traders baffled by the disconnect between the rising price of oil as a commodity and the price action in the oil companies themselves. While the oil companies have enjoyed the recent rally in crude oil they have not had the same percentage of gains that crude oil has. I don't see it as that big of a mystery.
Institutional buyers and hedge funds have for years used the oil market and commodities in general as their own little playground. And their being hesitant to ramp up the oil companies along with the price of crude says more to me about where the likes of Goldman Sachs and various mutual funds see [plan] on this market going.
Sure, a lot of smart people see crude easily trading up to $70, but then what. There is absolutely nothing to keep us trading at that range and believe it or not the dollar will not continue straight down, nothing does. What isn't definite is the direction of the SP 500. I am personally leaning towards the bearish side, breaking below 875. And if we do crude will retrace it's steps quickly.
Keep your stops tight, don't be the only one left holding crude at $70 dollars.
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