Weekly Update: January 27, 2016

| January 27, 2016

Weekly Update: January 27, 2016


Big Picture Outlook:

For the second week in a row, the price of WTI rallied after the EIA reported remarkably bearish supply information.  For the week of January 22nd, US crude inventories rose by 8.4 million barrels- a heavy addition to already overflowing supplies.

But WTI rallied 1.9% on the news…

What gives?

As I mentioned last week, when an oversold market rallies on bearish information, it’s a sign selling momentum is waning. 

But that’s not all…

There’s also word from multiple media sources that Russia and OPEC are discussing a unified production cut.  As you know, both have been pumping oil flat out the past year in an effort to retain market share.

But the recent drop below $30 a barrel may have caused them to rethink their strategy.  If the two producers agree to slash production, there’s no question what it will do to the price of WTI crude.

Let’s just say we’ll be very happy with our call position in $USO!

Speaking of which, let’s get to our open position updates…


Portfolio Highlights:

Just a quick note: I won’t update every open position every update.  I focus on the positions with significant news or price movement.

. . . . SPDR Gold Trust $GLD March 18, 2016 $106 calls

The price of gold is jumping to higher ground as investors seek out protection against rising equity market volatility.  The yellow metal surpassed technical resistance at $1,113 in yesterday’s session.  As a result, there’s a very good chance we see $1,140 soon.

Thanks to the upturn in gold, $GLD is rallying towards our first target at $110.00.   Keep holding these calls for higher prices!

. . . . iShares Silver Trust $SLV April 15, 2016 $13.50 calls

Much like gold, silver broke above an important technical resistance area in recent trading.  Given the breakout, a continued rally to the $15 an ounce area seems likely in coming days.

Remember, our profit targets in $SLV are at $15.00 and $16.50.  Keep holding these calls for higher prices!

. . . . US Oil Fund $USO July 15, 2016 $8.50 calls

With crude market bulls finally starting to wake up from a long slumber, $USO is seeing some positive price action.

However, we’re not out of the woods just yet…

We need a high volume close over $9.75 in $USO to really get the ball rolling.  Keep holding these long-dated calls for additional upside in WTI crude!


Category: Commodity Trading