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Trade Call: WLT And Where We Are At

June 23, 2008 10:52 PM

The move higher today was a trend break from the sharp sell-off we saw on Friday (that I called on the trade). The trade is still to short below the high, IMO. We could clear the high without going lower first, but that happens I would say less than 10% of the time. The market is risk/reward and that is the ONLY trade on WLT here. That is why you saw the very, very low volume today and it backed off the high. People buying today at the high on WLT either know something, or know nothing, and I suspect the latter. The odds are still great they are going to get the hammer.

If and when the trend higher breaks, the pressure “should” be on below the high. If this was a normal stock and not commodity, I would say a sell-off tomorrow would be a given, depending on the open. But the commodity stocks are a little more dicey as you almost have to know what is going on with the underlying commodity as well.

Keep in mind, as most readers know, I think trend trading is silliness. You never know where you are right, and where you are wrong. And my view of trends is always temporary, unless supported. Any move higher on WLT is NOT supported. Could it break the high? Yes. But buying near the high when it is not supported would be less than wise and the odds are FAR greater you will be crushed than make money. In addition, if it does clear the high, there is nothing to stop the fall once it turns again.

Written by Tom@StockBlade.com · Filed Under WLT 

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