Category: Pandemic Investing

USO

As you know, we are basically taking long positions in crude oil. We have 3 ways to get at the market. That is through the CFDs, Futures and ETFs. We have initiated a trade for the Unit Trust Investors Club and that trade is active. Here I want to give you a trade in the USO ETF which trades the shares of stock. Please note, we have not put up a trade yet in the Self Directed CFDs through the trust because I don’t have the computer software ready yet and doing it manually could be a disaster so bear with me on this one.

As I prepare this trade for you, Crude Light New York is trading around $103 a barrel. USO is trading around $76.50. Our objective is $150 oil. We’re trading the USO and we are BUYING about 300 shares at each average point which will cost us approximately $23,000 which would be very close to a futures margin but removing the futures risk and the fucking your broker is planning on giving you as he changes the rules to the game. You can adjust the positions by the number of shares of stock you buy according to the size of your account.

USO is currently trading around $76.50 a share which for our accounting purposes we’ll call $103 a barrel oil. We will probably add another position every $5 higher or lower basis Crude Light New York but that will vary because our slippage is around 10%. This is aggressive so if you don’t want to be as aggressive, you can BUY every $10 higher or lower. As always, we’ll advise you as we hit average points. My confidence level is at 70% in this trade which in view of the volatility risk, is a reasonable loss parameter.

Oil is right smack dab on the moving average which would suggest a breakout. This close to $2 drop when you look at Brent and Crude Light New York is a nice buy point. I have 3 things that I believe will drive this trade. Putin is about to declare war on Ukraine which ups the ante in the game. The EU is about to completely embargo Russian oil, most of which is delivered by pipeline to Europe. Which means that will force closure of the oil wells which will take 3,000,000 barrels a day out of the market. Third, early indicators show that demand for gasoline and diesel fuel will soar and the fight will be on to buy existing barrels. I could see a situation in the next 6 months where crude oil could hit $200 a barrel.

USO

This trade is very aggressive and NOT for everyone but if you’re feeling fat and sassy, we need to add another layer. We got our first USO trade around $82.00 and that was oil around $115.00. We got our second trade around $73.00 and that was oil around $101.00. We now have oil trading around $108.00 and USO around $78.00 so I want to fill in the gap that was created when we stood aside and let oil do its full drop.

This is aggressive as hell for what I call a pocket trade. My opinion is changing and I see oil possibly going to $150. The fucking idiots are not making the moves to ensure supplies. They are so in love with their sanctions that they’re sanctioning themselves by stopping gas and oil flows to Europe. The greenie weenies that are running the White House are still in love with their wind farms and solar panels and are unwilling to unleash the mighty U.S. oil industry. That might have to wait until the Republicans come to town after the midterm elections.

There is going to have to be a lot more pain before they give up the tree hugger fantasy of clean energy now. It might take oil above $150 a barrel to knock some sense into them.

So my specific recommendation is to BUY another 475 shares of the USO. Adjust this trade to your account size and risk tolerance but for me, I am convinced that oil has got more room to run on the upside.

Warning: This is a very volatile, shit market and anything can happen.

USO

We are now below our starting point of $81.70 in our trade which is a $10 drop, reflecting the over $15 drop in oil. This could be described as a peace dividend as low level peace talks have begun in Turkey. Excuse me if I’m not buying this. PR ditties to the side, the reality is Russia has bombed the Ukraine to the dark ages. Systematically, they’ve been cut off from the Black Sea. Their infrastructure is in tatters. 5 million people have left the country. There is no way this can be described as a win. We believe these “peace talks” will break down and no matter what scenario you look at, Russian oil production has dropped. Exports have dropped and nothing changes the fact that there is an oil crisis.

With this view in mind, it’s now time to BUY another 475 shares of the USO which is trading around $72.00. Adjust the number of shares you buy by the size of your account and according to your risk tolerance.

In closing, even if peace comes no one is about to remove the sanctions on Russia. So nothing really changes in the oil equation.

USO

As you know, I’ve been hot and cold on trading ETFs. The reason is that they changed the rules and at times it makes it untradeable and frankly they get pissed off if we score big bucks from them. You might remember our beloved DWIT which was a product of Swiss Bank. When we screwed them really nice on a trade and took nice profits, they fired their management team and unwound the product.

The USO is an amazing instrument. It seeks to track the spot oil price of WTI. Originally it traded futures contracts and tracked pretty well until they put the kibosh on it. Often times they were 80% of the daily volume in the spot contract and that meant that their trading could bend the market and that meant that club members lost a lot of money. Again, the rule changes. They gave them accountability levels and position limits. Their broker also played a lot of games on their margin requirements and they were untradeable. Continue reading “Trade Reco”

Crude Light New York

Bark, bark, bark. Remember me? I’m your barking dog at the gate. The mutant strain is taking the bid out of the oil market. So it’s party time. We’ve hit another average point at the 72.00 area. If the market is $1.00 under your lowest position, SELL another layer now. For those of you trading a less aggressive strategy, the market needs to be $2.00 under your lowest position. Hopefully we can make a nickel or dime and help offset your Amazon bill. Gobble, gobble, gobble.

Crude Light New York

No matter what your strategy, you’ve hit and surpassed an average point. As we speak, shutdowns are occurring around the globe. Oil is plunging over 5%. We are underneath as I speak the 73.00 average point so I need you to SELL another layer of positions right here, right now and consider this your 73.00 average point. When and If we hit 72.00, automatically SELL another layer.

Crude Light New York

In our speculative trades we go for moon shots and every once in a while, the rocket blows up on the launch pad. This could be such a trade. I hasten to add that my ultra conservative trades, government securities and our beloved STRIPS recently made a return of 15% to 50%.

This oil trade is in Crude Light New York only. You have 3 options for trading. To trade the full blown NYMEX 1,000 barrel contract will take an account funded by $105,000. $50,000 will be my anticipated margin requirement and we have the potential of losing $50,000 and making $200,000.

For those of you that have a smaller account, $50,000. You will simply trade the Minis and you are risking $25,000 with a profit potential of $100,000. For those who have $25,000 we have a strategy for you and you’ll be risking $12,000 with a potential to make $50,000.

The trade rationale is the same for all accounts. You’ll be trading the March futures contract. For the full blown contracts and the Minis you will be adding a position every $1.00 higher or lower without duplicating positions at any average point. For the super small accounts, you’ll be adding a position every $2.00 higher or lower without duplicating positions at any average point. For the full blown account traders we’re looking to add 10 positions basis the March futures contract, entering in at around $77.00. We’ll be trading positions on the short side all the way up to $82.00 ($82.00 in March would be the equivalent of $84.00 on the spot contract) If March goes to $86.00 a barrel, that will take Brent to $90.00.

There is no way in Hell the powers that be will allow $90.00 to $100.00 a barrel oil and there is no justification for this price. Like on so many other things the price plunge of April 20, 2020 temporarily shut down oil and the pipeline literally emptied out then demand crashed. All the oil you could ever want is available. Pipelines have to be restarted. Completed wells will be put into production and with the under investment in energy, bankers are rushing in to get in on the price bonanza.

By March, like every time after we see an oil price plunge and oil over $70.00 a barrel, within 6 months prices plunge right back down again. I see this trade taking us easily to $60.00 a barrel basis March. Do the math. Your average price will be $83.00. I expect to take profits at $63.00 so that would be a profit of $20,000 on 10 contracts, $200,000 in total.

For those of you trading the Minis you’re looking at a profit potential of $50,000 and those of you trading Minis at a $2.00 average point you’re looking at $25,000 but that’s the minimum because as the market drops below our $77.00 average point we’ll be adding more positions on the way down.

Before you make this trade, I urge you to listen to the Market Update posted on October 11th titled “Moon Shot”. To get access, contact Jim at 866-924-0607.

For those of you smart enough to be making the NASDAQ 100 trade I gave you, it’s time to take profits and take the cash off the table. If you traded exactly as we recommended and kept the trade all along, you profits should be over $75,000. Not bad but I promise we’ll do better. We will be back in this NASDAQ trade in short order.

We’re now in an oil trade that is showing profits so we are in a sweet spot. If you’d like to get these trades, please call Jim at 866-924-0607.

Back on May 31st we gave you a very simple trade and like so many of our trades, you buy them, you hold them and you forget them. The last time we spoke, that trade was making around $30,000. It’s now making $40,000 as the insane stock market rally continues. This is to update you and to tell you to continue holding your positions and to inform you that we will soon be exiting this trade.

We have also entered a trade in oil and we have trades coming up in Bitcoin, Gold and the S&P 500. A lot of people tell you about profits. We show you the profits. If you’d like to get in on the next round of trades, call Jim at 866-924-0607.