Oil volatility will continue to be very strong and the talking heads will inevitably say anything, something and actually nothing. Yes oil rebounded but to what end? Did it really make such a big move? Well if you were a buyer of oil at its low then yes you made a great investment, trade or whatever you want to call it. But if you were long oil from over $100 then you made back less that ¼ of your losses. While 24% sounds big in this case it is truly small. If you understand how numbers work then you would know that a 50% drawdown takes a 100% retracement to breakeven so 24%… not so exciting. Don’t let the numbers fool you. The media and everyone who wants to say something will quote these big numbers but they should not excite people but make them ask questions and do the research into the why.
We are in the beginning of a wild ride. I have stated that buying down here is a great opportunity and stick to that but we must be prudent and if you’re trading your last $5,000, don’t do it. And buyer beware. When we move back up you will then begin to see all the commercials again on what a great opportunity oil is. Understand you’re too late at that point so put your credit card away. Get all the facts first before you take the plunge into a game you may not belong in.
Donovan Lazar | Chief Revenue Officer
dl@enerknol.com | 212-537-4797 ext. 8
