Re:cap. I still want to build a long position here in the dollar. 75.50 is the fulcrum, to bail on this long position. I am looking for the dollar to catch a bid and rally up to the 80-81 level. This is a trade where we are looking for a 4:1 risk re-ward. If it breaks, take a small 1 to 1.5 cent loss.
Crude oil has now blown above that key resistance at 103.50-60. Now its really any one’s guess how high we go. I have written before the trend since the low at 34, has been higher major highs, and higher major lows.
I have noticed that gasoline is 30 cents away from 4.00/gal here in Illinois. 4.00 to 5.00 seems a slam dunk for this spring/summer. But a large part of that is the fact that we in the US don’t have refinery capacity.
Also, if China is buying more GM cars than anyone else in the world, it seems to me that they will need gas for those cars.
All the hybrids in the world in the US won’t be able to defer or depress the force of 1 Billion people who want to go mobile.
4.00 gallon gas will put the ka bosh on the fledgling economic recovery, I imagine. In effect, it is a tax. People won’t be going to Appleby’s or Denny’s as much if it costs them 100 bucks to fill up their 20gal gas tank.
As far as crude, at this point, I think you buy against the 103 level. What was resistance becomes support. The old high from Summer 08 was around 143. Will we see that again? Only the amazing Kreskin and the Psychic Friends Network know for sure.
One thing for sure, it will give us trading opportunities. Buy dips, sell panic highs. Manage the trade, more than the opinion.
That is all.
Have a good Day.
CER
