Oil goes down 60 cents. Has the trend changed? Is it now pointing downward? Nick Rowe, manager of Focus Capital Wealth Management Inc., has a nice allegory. Tie a string to a sausage. Take it across the yard and stretch the string straight back to the house. Watch the dogâ€”assuming you have a lively dog and a big yard.
The dog, according to Mr. Rowe, picks up the scent of the sausage, then loses it and moves away from the stringâ€”the trend. But he catches the smell again and comes back to the straight path. His movements stay within a range, like fluctuations in prices around a steady trend.
Obviously this wonâ€™t work for people who live in apartments and lack a yard or a frisky dog. Theyâ€™ll have to be content watching the oil market.