Wednesday we saw another substantial drop in oil prices, with NYMEX crude settling at a dime above $135.00, ostensibly on rising US inventories. Whether this is a just a pause of a few days, or a full-blown final head-fake to the downside in oil prices, I urge you to pay as much, if not more, attention to the emotional reactions to this story as to the text of the "news" stories themselves.
As Jeff Vail points out, worldwide demand probably, especially from the IC of the BRIC countries isn't likely to slow appreciably. For a fungible commodity like oil, this has serious implications for the supply-demand picture.
Keep your eyes on the emotions behind the news. Analyze what are considered stories. Watch the anger building against scapegoats such as speculators, watch as the financial titans eat their own (Bear, gone. Lehman sniping and blaming others for their trouble - not their leveraged balance sheet.) and watch for other socionomic signals to continue to pop up.
Here's hoping we have a good solid rally over the coming weeks. I think this is possible. We are dancing on and around major trendlines here and I think a solid run-up to the high 11,000's is quite possible. But use this opportunity to finalize any plans you have to rearrange your financial situation. If you have over $100,000 in any bank, please consider splitting that among strong banks.
Things are weird out there, friends. This transition is, in my opinion, going to end with a snap crash. Like boiling a toad, we are in the warm water right now - but it feels good for the most part. When it flashes over to a boil, it will be too late.