At long last, we are having a pullback in global financial markets. Most investors would agree that it is long overdue. But now that we are in the midst of it, the bears are out in full force. Ignore them.

"Libya Rebels Tighten Noose" read Friday's headlines in the Wall Street Journal. The national media is devoting huge blocks of time and resources to cover unfolding developments in a country that supplies less than 2 percent of the world's oil. And yet both retail investors and seasoned professionals have been dumping stocks in panic this week. Who says markets are efficient? Honestly, these events may provide the drama and justification for the sell-off, but for me I care only for the outcome.

Yesterday oil hit $103 a barrel. For over a year, my interim price target on oil has been $100 a barrel. I promptly advised readers to take profits (see "Oil hits my price target"). If you missed it, you can read the entire story on my blog at www.afewdollarsmore.com.

The reasoning behind this sale is threefold: 1) contrary to the talking heads on television, I do not believe that these Middle Eastern rebellions will jeopardize global oil supplies and 2) I also expect that Saudi Arabia can and will easily make up any shortfall due to Libya's suspension of oil exports. Right now that shortfall is roughly 700,000 barrels a day.

Finally, U.S. economic growth is moderate at best. On Friday, for example, GDP for the fourth quarter of 2010 was revised down to 2.8 percent following a 2.6 percent rate in last year's third quarter. Those are less than half the growth rate the U.S. normally experiences in prior recoveries. Those numbers do not justify oil prices at existing levels. Today, oil is trading around $97 a barrel. I expect that we will trade in a $5 to $6 a barrel range until there is some resolution in Libya, and then prices should fall back.

Many investors were also surprised at the U.S. dollar's behavior during this latest crisis. The dollar has historically been perceived as a "safe" investment when other securities are not. In the past, its value has risen in uncertain times — but not this time.

Instead, gold and silver spiked higher as investors worldwide preferred precious metals rather than the dollar as a place to hide until this crisis passes. Gold and silver still have room to run and neither has reached my price target.   

Some market analysts argue that because this crisis is about oil, and not financials, the dollar provided little security since higher oil prices would clobber our economy. Economists claim that $100-a-barrel oil will knock a full percentage point off U.S. GDP. They point out that the currencies of Canada, Switzerland and Norway did move higher, however. Two out of these three countries are oil exporters and all are more energy efficient and have higher interest rates than the U.S.

I'm not sure I buy that explanation in its entirety. I have written before that we are in a transition period in which the U.S. dollar is losing its preemptive place among the world's currencies. In my opinion, it may still lay claim to being "first among equals" but over time the dollar will join with a basket of other currencies in providing a new global foreign exchange benchmark. This may simply be another sign that investor's behavior is changing.

As for this pull back, we have already dropped 3 percent or so on the S&P 500 Index. My forecast was for a 3 to 5 percent decline, so maybe we have seen the worst of it, or we might still have a few more days next week before it is over. Either way, buy the dip.

Bill Schmick is an independent investor with Berkshire Money Management. (See "About" for more information.) None of the information presented in any of these articles is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or e-mail him at wschmick@fairpoint.net. Visit www.afewdollarsmore.com for more of Bill's insights.

This article was supposed to run Saturday morning but was accidently scheduled for a later posting date. We apologize for any inconvenience.

If there is one thing I've learned in forecasting commodity prices, you have to be disciplined. Here in the U.S. our benchmark crude for April delivery hit an overnight high of $103.41 in electronic trading. It's time to sell.

One-hundred-dollar oil has been my target now for well over a year. It is an interim price target because I still believe that over the long term (over the next few years) we will see the price of oil much higher. But for now this rally is on its last legs.

"How can you say that?" demanded one client who just recently jumped on the oil bandwagon. "Don't you read the news? The Middle East is coming apart. The world's oil supplies are in jeopardy."

That is the kind of sentiment that makes me feel even more confident that it is time to take profits. Sure, there are pressing issues over in oil land and I don't deny that there will be additional turmoil before all is said and done. However, I do not believe that the world's oil supply is in jeopardy.

Keep in mind that Libya produces less than 2 percent of the world's oil. Its "King of Kings" (as Moammar Gadhafi likes to be called these days), is in my opinion, a certifiable madman and his ultimate demise would be cause to celebrate. However, that may take some time to engineer and in the meantime oil will most likely stay at these nose-bleed levels. Ultimately, when the crisis has passed, we will once again be back to a global economy that is growing slowly and definitely not at a pace that justifies such high price levels for energy.

This temporary spike in oil is great news for the media. It has spawned an entirely new "what if" series of gloom and doom economic scenarios, which in turn has driven the stock markets down 3 percent.

"Auto sales will be decimated," says one talking head.

"Four-dollar gas is round the corner," predicts a young gas station attendant solemnly.

"The economy will be thrown back into a recession," says an economist, still smarting from his conviction that we would experience a double-dip recession in 2010.

"The consumer will be crushed."

"Restaurants will close."

"It's the end of the world." (My quote).

Those kinds of statements will certainly sell newspapers or keep you tuned into CNBC, but beyond their entertainment value, I see no point in listening to these Doctor Dooms.

Folks, my advice is to keep this present state of affairs in perspective. We were badly in need of a market correction. Now, we have it, thanks to the Middle East.

A month from now when this blows over and the price of oil is considerably lower than today you will be wishing you did two things: 1) took advantage of lower stock prices and 2) sold oil, if you owned it.

Bill Schmick is an independent investor with Berkshire Money Management. (See "About" for more information.) None of the information presented in any of these articles is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or e-mail him at wschmick@fairpoint.net. Visit www.afewdollarsmore.com for more of Bill's insights.