We've been burned everytime we've even thought about covering our oil short so we are staying short for now. We will cover as soon as we see signs of stabilization, but there is no point in catching a falling knife. $8.50 bbl in profit so far. We're hoping for $70 if we're lucky but we could cover anywhere between here ($74) and $70. There should be strong support at $70 driven by the trendline and 200D MA.
We are watching the S&P 500 closely. We WILL NOT COVER if the S&P looks like it is in freefall as that will invalidate any support/resistance levels in the crude market. As we saw last fall, the S&P 500 drives sentiment towards the crude market so it is very risky to buy crude when equities are dropping sharply.
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