Weekly Update: December 24, 2013

| December 24, 2013

Weekly Update:  December 24, 2013


Commodity Watch:

***Editor’s Note***  Due to the holiday shortened trading week, you’re receiving Wednesday’s regularly scheduled update today!  From all of us at Commodity Trading Research, we hope you have a safe and wonderful holiday!


This morning’s US durable goods report came in remarkably strong.  Orders for long-lasting manufactured items jumped 3.5% in November… a much larger increase than economists were expecting.

What do durable goods have to do with commodities?

Strong durable goods orders equates to a strengthening US economy.  And when the economy is strong, commodity demand rises!

Let’s take a look at our open positions…


Portfolio Recap:

. . . . US Oil Fund (USO) January 2014 $34.50 Calls

This week’s EIA oil report is delayed until Thursday, so we don’t know whether crude inventories rose or fell last week.  However, what we do know is our $34.50 USO calls are in a profitable position.  In fact, as of this writing, we’re sitting on a 40% gain.

But as you also may be aware, WTI crude is trading at just over $99.00 a barrel this morning.  That’s a stone’s throw away from our second profit target of $100.

Let’s not get greedy with this trade.  A short-term gain of 40% is nothing to shake a stick at.  Go ahead and sell to close the USO January 2014 $34.50 calls.

Congratulations on a solid trade!

. . . . iShares Comex Gold Trust (IAU) January 2014 $12 Puts

Gold is still struggling to hang onto the $1,200 an ounce technical support area.  By now you know how important this level is to this commodity.  A close below it and we’ll likely see the yellow metal fall to the $1,150 area or lower.

Keep holding these puts for further downside potential in the price of gold!

. . . . iShares Silver Trust (SLV) January 2014 $20 Calls

Much like gold, silver is struggling to stay afloat.  As a result, it looks as though our risk-controlled bet on a bullish reaction to the tapering news isn’t going to play out. 

Let’s go ahead and close this trade for a small loss of $21 per contract.

. . . . US Natural Gas Fund (UNG) January 2014 $22 Calls

Wow, what a month for natural gas!

The commodity ran from $3.80 mmBtu on November 22nd all the way up to $4.50 in yesterday’s trading session.  That’s an outstanding 18% gain in just a few weeks!

Thanks to this remarkable run, we collected a hefty 90% profit on our last UNG call trade.

And now we’re looking for more gains with this trade…

The NOAA’s most recent 6-10 day outlook is once again calling for below normal temperatures in the Midwestern and Eastern US.  That means we should see another round of above average EIA storage withdrawals.

Keep holding these calls for higher prices!


Category: Commodity Trading