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TSO and VLO are two examples…

March 20, 2008 12:48 AM

TSO and VLO are examples of hope and guessing. As my newsletter points out, I do not guess. My number on VLO was $47.65. Once that is violated, I exit until I see a new number. It did plunge $3 once that was cleared, so my number was correct. Where is the high on VLO now? More importantly, where is the low? I have no idea and neither does the market. Therefore, I consider it an avoid until further notice.

People long those two today were guessing and hoping. If VLO skyrockets and goes to $70, then they guessed right and great for them…but they were guessing.

My call to short CHK today was not guessing. My exit number is $49.88. Period. The only reason I said to short $47.50 and not higher was that I had strong reason to believe it would not clear $48 today and that was probably the highest price I could get to be short.

If you guess and hope, you will make market returns or far worse unless you are an exceptionally lucky person.

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