But to try and answer your question about exit points, I guess as long as oil goes up and up, and people continue to pay increasingly higher prices of gas, continue to buy gas guzzling vehicles as what I can see, continue to buy increasingly expensive fancy imports...and yet through all of this the economy is still expanding, I see it as bullish for the current trend. The trade outlook is only now starting to correct itself in the form of dropping deficits, and that along with the dropping budget deficit should allow reality to kick in but when that happens I have no idea.
Ok, you’ve admitted you’ve lost sight of any potential for a top. Is that not maybe the definition of the top? GS accurately predicted oil would hit 100. Now we are right there, and some other folks, are trying to up that number to 160. The first number was right, it was a big stretch, which myself laughed at along with many others.
Today, I unloaded a bunch of stocks, I had gains from 100-600% going. I chose to do so, because I was afraid I’d turned into a pig, on my clients behalf. Sometimes, you just say, enough is enough.
Besides, the stuff I’m buying now, I’m more excited about than the stuff I sold. I turned in stocks that had become high risk/low return, for the opposite.
I’ve noticed with stocks, that everyone piles into, that stops are completely ineffective. Turns out, everyone has the same stop points, the gap downs make them worthless.
Not sure where to look, but somewhere in the reading of history of 1993 might be some reminders what pricked the bubble, especially in England and Mexico. Suttle things, easy to overlook I’d bet.
IMO, the falling dollar is being driven more by the incredible level of USD denominated foreign reserves and the current account deficit, rather than interest rate differentials. Foreign appetite for USDs is just about satiated, so who will fund our current account deficit going forward? Just tonight, a comment by China on their desire to diversify out of the USD sent the USD plunging. It’s true a falling dollar should narrow the gap, but with the way manufacturing has moved overseas and with current labor cost differentials, it’s not clear to me that the trade deficit is as sensitive to changes in the USD as it once was, which means we would probably need to see a large drop in the USD to have a material impact. But a falling dollar is a delicate issue. There are so many USDs out there (held mainly in the form of US Treasuries) that triggering a mass exodus by foreigners seems like it would be disasterous.
On oil, supply projections are fairly flat from what I’ve seen, while demand is projected to grow significantly due mainly to India and China. It seems like the fundamentals are there to maintain a high price. It wasn’t that long ago that analysts predicting $80 oil were ridiculed on CNBC.