Last week, I wrote that I expected a bounce in crude before long, and as WTI has continued to fall the trolls have had a field day, pointing out that I was wrong. Let’s for a minute not dwell on the fact that I said it may not happen immediately and assume that it was simply a wrong call. I can only assume that those pointing that out have never traded or are new to it as a pastime. The simple fact is that in a dealing room, pointing out that somebody got a call wrong is like pointing out that they are breathing. Getting things wrong is an everyday, or rather many times every day, occurrence; what defines you is how you deal with it and what you do next.
Sometimes that means simply changing your view. To do that involves understanding something fundamental…the market can never be “wrong”. I was taught early in my dealing room career that while you may believe that the market is missing something important or misinterpreting some information, the price is simply an expression of the last point at which two counterparties were prepared to transact. As such, it can’t be “wrong”. That is encapsulated in the old saying that the market can stay illogical a lot longer than you can stay solvent.
In this case though, while I understand that the market isn’t wrong, I do believe that fundamental and technical factors combine to make a rapid reversal likely at some point soon and am therefore prepared to have another crack at…
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