Weekly Update: January 15, 2014

| January 15, 2014

Weekly Update: January 15, 2014


Commodity Watch:

Here’s the oil bounce we’ve been waiting for…

As of this writing, WTI is trading $1.71 higher on the day at $94.30 a barrel. 

The commodity is rallying hard after the EIA reported a US crude supply drawdown of 7.7 million barrels this morning.  That’s a much larger drawdown than analysts expected and an enormous jump over last week’s 2.7 million barrel draw.

From here, we’ll need a solid break of $95.00 on good volume.  If crude pierces that level, there’s a very good chance of our first profit target at $97.00 being achieved in short order.

Keep holding the US Oil Fund (USO) February 2014 $33.50 Calls for higher prices.

Let’s take a quick look at our other open position…


Portfolio Recap:

 . . . . iShares Comex Gold Trust (IAU) January 2014 $12.00 Puts

Chalk this trade up to a complete lack of conviction from either side of the market.  Bears simply couldn’t push gold lower.  But at the same time, bulls didn’t gather enough steam to get the commodity out of a downtrend. 

The result was a choppy and meandering gold market over the past few weeks…

With expiration coming this Friday, go ahead and close this trade.

Until next time,

Justin Bennett

***Editor’s Note*** Tomorrow’s EIA natural gas storage report is going to be quite an event.  I’m expecting another record withdrawal thanks to the “Polar Vortex” that swept the country last week. 

However, with natural gas already trading near the recent December high, another huge withdrawal may not be enough to bring bulls out in force.

Keep a close eye on your e-mail inbox for another exciting natural gas trade!


Category: Commodity Trading