Weekly Update: February 12, 2014

| February 12, 2014

Weekly Update: February 12, 2014


Commodity Watch:

This morning’s EIA oil inventory report revealed a rather bearish build of 3.3 million barrels.  Upon hearing the news, investors were quick to take profits on this morning’s run to $101 a barrel.

Bottom line…

Don’t be caught long the crude market right now!

Let’s look at our open positions…


Portfolio Recap:

 . . . . US Natural Gas Fund (UNG) April 2014 $21 Puts

No doubt about it, natural gas is all over the map.  The commodity bounced back to the 52-weeks highs of $5.50 mmbtu last Wednesday before collapsing to $4.60 mmBtu on Monday.  And if that weren’t enough, natural gas is pushing back towards $5.00 as I write.

What has gas back on the upswing?

The Southeastern US is experiencing a nasty snow and ice storm right now.  This news is helping to keep a bid under natural gas prices for the time being. 

But here’s the deal…

Once this storm passes, a huge warming spell is expected to envelope most of the US.  And that means we’ll likely see investors take a more bearish stance on this commodity in the very near future.

For now, keep holding the April $21 UNG puts and the April $23 UNG puts for additional downside in natural gas.

. . . . US Oil Fund (USO) February 2014 $33.50 Calls

As you know, we officially closed out the USO call trade last Friday for a gain of 118%.  If you haven’t already, go ahead and close this trade for a hefty short-term profit!  Oil is trading above $101 a barrel this morning, but continued upside is likely limited.

. . . . iShares COMEX Gold Trust (IAU) April 2014 $12 Calls

Gold is seeing solid bullish action over the past few days.  The commodity rose $15 an ounce yesterday, and has tacked on an additional $5 in gains today. 

With this trade going out on Tuesday, you should have already had the chance to add the $12 IAU calls to your portfolio for around $0.65 per contract. 

Don’t pay over $0.65 for these IAU calls!

Keep holding for additional gold gains in the months to come…


Category: Commodity Trading