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Thursday, April 7, 2011

Market Thought... itching to short oil

My market thesis, and action, has not changed since my last Market Thought post 'reality'.  I am still protected, except I see  more hints of bullishness to break this resistance. We are easing out of the overbought condition, while staying at the high end of the channel range.

The 14 and 62 SMAs are seemingly bullish, while the fundies are still pretty inexpensive. (The market seems like it wants to rally with earnings.) I will still cover the protection around 1320.

Despite my view of the market, I am itching to short Oil.  At the moment, it is purely based on the technicals. It has rallied hard, and it is very very overextended via the short and long-term trends.

I am looking to short via the USO July Puts at the 45 strike.  Technically, I will be looking to cover the short when the WFIC nears 105.  Fundamentally, I would like to cover when the WFIC is in the high 90s.

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