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CROSSING 100
When it got to 98 I said to myself, "Bethlehem is going through 100, and when it does the roof is going to blow clean off." The tape said the same thing, more than plainly. In fact, it used a megaphone. I tell you, I saw 100 on the tape when the ticker was only printing 98. And I knew that wasn’t the voice of my hope or the sight of my desire, but the assertion of my tape-reading instinct. I rushed to my broker’s office and put in an order to buy 500 shares of Bethlehem Steel. I got them at 98 to 99. After that, she shot right up and closed that night, I think, at 114 or 115. I bought 500 shares more. The next day Bethlehem Steel was 145. It was an old trading theory of mine that when a stock crosses 100 (or 200 or 300) for the first time the price does not stop at the even figure but goes a good deal higher, so that if you buy it as soon as it crosses the line it is almost certain to show you a profit. Timid people don’t like to buy a stock as a new high record. But I had the history of such movements to guide me. I first read these words more than 25 years ago, and it stuck with me. Through the years, I've seen this simple yet powerful rule proven true time and time again. For example, take a look at the chart of Chicago Mercantile Exchange Holdings (CME) from April of 2004. That was the first time the stock crossed 100. CME
Source: Commodity.com CME has never been below 100 since. This rule holds equally true for commodities. Cotton has only crossed above 100 ($1 per pound) one time in its history back in February 1995. When it crossed, it didn’t stop until it reached 115 in just a few trading sessions. Cotton
Source: Commodity.com When sugar first crossed 100 (1,000 on the tape, or 10 cents per pound) in October 2005, it didn’t stop either. It quickly ran above 1,100, then above 1,200 and then above every XX00 until it reached at its 1,973 peak in February 2006. Sugar
Source: Commodity.com This brings us to the big one: crude oil. Oil traded as high as $99.29 a barrel last week, reaching a new closing high of $98.18 a barrel on the New York Mercantile Exchange on Nov. 23. Oil
Source: Commodity.com No, oil hasn't traded above $100 a barrel yet. And unlike Jesse Livermore, I don't see it on the ticker until that extra digit is printed. However, the fact is the world is currently producing at 99 percent capacity with no indications that record-high prices are rationing demand. Think $100-a-barrel oil will be a spike? Take a lesson from one of the master traders of all time. If oil does cross $100 a barrel, then the new mark may just be the start.
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