Weekly Update: 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
