Tuesday, July 15, 2008

Oil Tumbles (Largest Drop Since Gulf War)



Today oil priced had their largest drop since the gulf war. As a result the oil stocks sold off as well triggering my protective stop to get hit in XLE.

If you recall I bought XLE yesterday and took the trade off today at a loss. I don't hang around very long if things aren't working out in my favor. Looking at the above chart you'll notice that XLE didn't make new highs with oil. I was aware of this but I didn't realize the divergence was that large. Maybe this trade in XLE could have been avoided.

1 comment:

Gary said...

Might I suggest that XLE had already broken the trend line. It was probably not a very high probablity trade from the beginning.

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