CHOPPY ACTION

I think we continue to see choppy action and I believe that one of the greatest disciplines in trading is to know when to stay OUT!!!! I have lost a lot of money in the past by forcing trades.

That said, I am more convinced than ever that we are going to see increasing oil prices. Natural gas will follow. Inventories showed that oil demand is at least stabilizing and will grow in the long term. The dollar is going to continue to be choppy but weakening and this will push oil prices upward. That combination is worrisome. Oil prices acted like a tax on the American consumer and I believe had a lot to do with consumer confidence numbers last year. I will detail the plays that I like in the oil and natural gas space in our post this weekend.

Don't get emotional about this market---it is easy to see a good run in one direction and believe that we are off to the races in that direction. Look at the overall picture and you see price action that would lead you to believe that this market could go higher. Listen to what is going on with the dollar, housing, oil, and other commodities and you know that this economy faces headwinds. My recipe for staying cautious and waiting for more clarity before putting my money at risk.