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How to Trade the Oil “Rebound” Today

Aug 04, 2015

OPEC thinks you’re a sucker…

The group again believes oil has hit bottom again. The same group that called for $200 oil after a fall to $45 a barrel, now believes a bottom is in place… again.

OPEC can say what they want, though.

But there’s still no clear indication a bottom is in place.

Unfortunately the bulls – undoubtedly hoping OPEC is right this time – will lose money just as they have many times before, as record levels of output increase.

Don’t forget this is OPEC. It’s self-serving agenda is more important that honesty.

Second, despite recent rebound action in the price of crude, there’s no bottom in sight. We have to remember that traders have been sucked into oil rebounding hopes before, only to watch their hard earned cash disappear.

We’re hoping for some signs of support at March 2015 lows. If that fails to hold, look out. Short any rallies in oil by buying any of the following:

  • Power Shares DB Crude Oil Double Short ETN (DTO)
  • Power Shares DB Crude Oil Short ETF (SZO)
  • Pro Shares Short Oil & Gas (DDG)
  • Pro Shares Ultra Short DJ-UBS Crude Oil (SCO)

 

The Bad News Bear Trades

Aug 03, 2015

After a nice end of day pump, the Dow finished down 91.66 points….

While I’d usually recommend buying the fear, I can’t.

Market participants have every right to fear downside here. If the Dow fails to hold 17,400 support, we could slip as low as 17,000 --- January 2015 support.

Will the bulls attempt to run the market up again? Sure…

Will they lose money doing so again? You bet.

Oil prices, geopolitical issues, the Fed losing control of just about everything, China, you name it… And it’s wreaking havoc.

Puerto Rico is about to default on monstrous debt this weekend. An important S&P trend line has been broken. The Greek deal is about to fall apart (I’m shocked). Exxon Mobil is circling the bowl with poor earnings.

Financial markets are crashing.

Until something miraculous happens, we’re headed lower. I’m still a buyer of the DXD and SDS, which we’ve recommended here on July 15.

 

 

Staples (SPLS): A big bet on upside

Jul 31, 2015

Some one is bullish on Staples…

Yesterday, overall volume in SPLS was 30 times greater than average. Calls outweighed puts by more than 500:1.

After a rough sell off from $16.50 highs, the stock has become technically oversold on RSI, MACD and MFI, most notably. I don’t believe such lows can be sustained for much longer. I’d like to see a move to at least $16 near-term.

One of the best ways to trade this oversold stock is by buying to open the SPLS January 2016 14 and 15 call… and wait.

 

Never Buy an IPO Again...

Jul 30, 2015

Never waste your money on an IPO ever again.

Unless you have friends in high places, it was impossible for retail investors to get in early on stocks, like Twitter on day one.

But that doesn’t mean you can’t get in months ahead of time.

You can trade the First Trust IPOX-100 Index Fund (FPX).  This fund tracks the U.S. IPOX-100 Index, which includes the 100 largest, typically best performing, and most-liquid IPOs in the U.S. The index measures the average performance of U.S. IPOs during the first 1,000 trading days.

I bought it months prior to Facebook, Visa and MasterCard… and watched it pop from lows of about $15 to more than $55 today.

That’s a gain of 267%. It’s a safe, easy way to trade IPOs.

I'm still a buyer these days, as the IPO market continues to heat up.

 

Under Armour (UA) Returns 214% in 2 Months...

Jul 29, 2015

Well, that was easy…

On June 8, 2015, we issued a buy recommendation on the UA October 82.50 call up to $5.10, as the stock consolidated under $82.50. We argued the company was fundamentally sound, betting on further upside in the name.

Today, the calls – picked up at $5.10 – now trade at $16, as the underlying stock accelerates to all-time highs. Consider taking the win off the table now. The stock is beginning to over-extend on MACD and RSI.

 

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