The Tycoon Report

Is the Oil story over?

Tuesday, February 14, 2006 | Teeka Tiwari

Halleluiah! 
 
Crashing oil prices ... I love it! 
 
Now before you go ballistic, let me explain. 
 
I know what you're going through. 
 
You see your oil stocks are down, you see the OSX getting beaten up, and you're concerned. 
 
Understandably so. 
 
Your natural inclination is to cut bait and run. 
 
I absolutely understand. 
 
I do. 
 
Now back on January 9th I wrote that I thought we’d get a pullback from 200. 
 
I was wrong, instead it shot right to 220 and has now backed off to the high 190’s. Big Deal! 
 
I’ll say it again. 
 
BIG DEAL! 
 
I’m sure many of you are thinking that you could have sold your options at 220 and now they're down 20 points and you’re mad. 
 
Don’t be. 
 
As I wrote back in January, take a look at a 2 year chart of the OSX and you will see a classic “stair case” pattern of movement. 
 
For instance, back in March of 2005 the OSX hit 145 by mid May.
 
It was 125 by July. 
 
Then it was at 150, and by September it was at 180 ... only to hit 150 again by October, and then 224 by January!! 
 
Even if you had lousy timing and bought at the high of each move, as long as you didn’t panic and sell, you would have made money on average within 8 weeks of putting on the trade.
 
You’ve got to focus on the primary long term trend. 
 
If you have confidence in the primary trend, then you have the mental staying power to not only hold onto your position, but to add to it when it’s getting beaten up and 
more importantly not beat yourself up if your price and timing is a little off. 
 
Remember, my long term target on the OSX is 600. 
 
So don’t panic, this is a normal pattern of price movement. 
 
I’m keeping a close eye on the index and will be recommending to buy more soon. 
 
So keep your eyes open for my email alert.




Teeka Tiwari
Chief Investment Officer
ETF Master Trader