Monday, September 22, 2008

Well, That Was Fast.....

From a wise blogger posted on 9/17/08 - just 5 days ago -

"3) Oil's En feugo! At least for today. Again, I'm of the opinion that people are eventually going to sell US dollars and buy commodities (Oil and Gold - up $87/ounce as a I write this) to fight the inflation bug that is coming. I'm not sure when this trade occurs but since the analysts are starting to lower their target price for oil, it's a pretty sure sign that we're near a near-term bottom in oil and the price could reverse quickly." The fact that analysts continue to be such a fantastic contrarian indicator is unbelievable.

It seems that the prospective cost of the $700 billion bailout and it's impact on the fiscal health of the Federal government led the gold bugs and oil bandits to rush back into hard assets.

Note the charts of Oil and Gold -
Oil exploded today finishing up $16 and trading as high as $130 today.
Gold is up about $150 or 20% in a couple of weeks.
This is likely a short-term trend, but the wild swings in commodity prices seems to indicate that the markets will remain extremely volatile for the near future.

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