Weekly Update: July 1, 2015

| July 1, 2015

Weekly Update: July 1, 2015


Big Picture Outlook:

According to various reports, nuclear negotiations with Iran are going better than expected.  As you may remember, Western powers and Iran have been racing to meet a self imposed June 30th deadline for a nuclear deal.

After extending the deadline for another week, it looks as though a deal might be possible.

Details are sketchy, but one thing is for certain…

The oil market is acting as if a deal has already been reached.  The price of West Texas Intermediate (WTI) fell by over 4% today to $56.89 a barrel.

But here’s what’s most important…

WTI fell to its lowest price since late May, which puts it on the lower edge of the trading range that has proven so hard to break in recent trading.

Today’s price action could be signaling the start of a bigger bearish move for oil in coming weeks.

Here’s how a few of our open positions are reacting to this development…


Portfolio Highlights:

Editor’s Note: I won’t update every open position in every update.  I focus on the positions with significant news or price movement.

. . . . US Oil Fund $USO July 17, 2015 $20 calls

After a frustrating sideways pattern chewed up most of the time value in our $20 calls, $USO finally hit our adjusted risk control line at $19.85 on June 26.

Given the current technical situation in oil, along with the looming expiry of these calls, it’s best we exit this position completely.

. . . . iShares Silver Trust $SLV July 17, 2015 $16.50 puts

$SLV finally hit our second profit target at $15.00!  The latest downturn is giving us an ample 138% return on our $16.50 puts.

With silver currently trading at important technical support, the odds of a bounce are growing.  However, there’s still a good chance the metal drops to new multi-year lows by our expiration in a few weeks!

If you’re aggressive, keep holding a small portion of your $SLV puts for further gains.

. . . . Market Vectors Gold Miners $GDX July 17, 2015 $19 puts

Here’s the big breakdown in gold miners we’ve been looking for!  $GDX hit our first profit target at $18 on June 29th and has extended its losses in the past two days.

Today’s downturn sent the gold mining ETF plunging to $17.29, which is just a stone’s throw away from our second profit target at $17.00!

We’re currently sitting on gains of over 100%, so be sure you take some profits off this trade- no matter what!

. . . . Silver Wheaton $SLW July 17, 2015 $18 puts

For those of you that stuck with this put trade, you’re being rewarded handsomely.  The silver streaming company dropped to our second profit target at $17.00 today, giving you a gain of 123% on our $18 puts!

If you’re aggressive, keep holding a small portion of this trade. $SLW looks poised to test the intraday low of $16.44 set on November 5th, 2014.

. . . . SPDR S&P Oil & Gas Exploration & Production $XOP September 18, 2015 $48 puts

$XOP just fell through the floor!

The oil exploration and production ETF dropped 3.15% in today’s session, closing at $45.19.  Of course, our $48 puts are reacting very well to the breakdown.  They jumped to a max bid price of $4.10 today, which gives us a solid 59% gain on our puts.

And remember, since our first profit target was met at $46 today, conservative investors should have taken some profits off the table!

If you’re aggressive, keep holding your remaining put contracts for our second target at $43.00.  At this rate, we should be there shortly!

. . . . Whiting Petroleum $WLL September 18 $36 calls

No doubt about it, today’s downturn in crude sent $WLL bulls out to pasture.  The Bakken oil explorer dropped hard today and hit our risk control line in the process.

If you’re conservative, I highly recommend you close this trade to conserve capital.


Category: Commodity Trading