Weekly Update: July 15, 2015
Weekly Update: July 15, 2015
Big Picture Outlook:
Things are starting to look rather bleak across the commodity landscape this week. Crude is down to multi-month lows at $51 a barrel today, while gold is selling down to $1,147 an ounce- also bordering on multi-month lows.
What’s causing this weakness?
Look at the US Dollar…
As you can see, the greenback is poised to break above (red circle) an important resistance trend line (green line). If the dollar rallies above this technical resistance area, we may see another significant downturn in major commodities.
Remember, gold, silver, and oil generally trade inversely to the US Dollar. In other words, when the greenback rises, these commodities tend to weaken.
Be on the lookout for a trade to profit from this potential Dollar breakout in your email inbox soon!
For now, let’s update a few of our open positions…
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.
. . . . Newfield Exploration $NFX July 17, 2015 $37 calls
Unfortunately, $NFX never got the rally we were looking for. As a result, these calls are going to expire worthless this Friday. This trade is officially closed.
. . . . Joy Global $JOY July 17, 2015 $44 calls
Here’s another trade that never got going in the right direction. In fact, $JOY has taken quite a downturn in recent weeks. Obviously, our $44 calls are expiring worthless this Friday. This trade is officially closed.
. . . . US Natural Gas Fund $UNG July 17, 2015 $14 calls
If you’re still in this trade, you’ll have to keep a close eye on it the next few days. $UNG is trading just shy of our strike at $14 a share as I write. If the natural gas ETF rallies in the money over the next two days, make sure you exit this trade by Friday’s close.
Otherwise, you’ll be the proud owner of $UNG shares at $14.00 next Monday morning!
. . . . iShares Silver Trust $SLV July 17, 2015 $16.50 puts
Our $SLV puts are expiring this Friday. Since they’re deep in the money, you’ll need to exit this trade by the end of this week. If you don’t, you’ll be short $SLV at $16.50 come Monday morning.
Remember, we profited nicely on this trade as $SLV hit both our downside profit targets!
Congratulations on a great trade!
. . . . Market Vectors Gold Miners $GDX July 17, 2015 $19 puts
Gold stocks just can’t catch a break right now…
$GDX is collapsing to new multi-year lows at $16.28 as I write- not a good sign for gold. This intense selling pressure may be a sign the yellow metal is on the cusp of a big breakdown.
The recent downturn in $GDX has our $19 puts jumping to a $2.63 bid today- a 240% gain from our entry at $0.77.
These puts expire this Friday so be sure to exit this trade by then!
. . . . Silver Wheaton $SLW July 17, 2015 $18 puts
Just when you think it couldn’t get any worse for $SLW- it does!
The silver streamer is plummeting to new multi-year lows below $14.50 today. The downturn has our $18 puts surging to a $3.55 bid this afternoon- a 596% gain from our entry at $0.51!
If you’re aggressive and held a few of these $SLW puts for a situation like this, you’re getting paid nicely! Keep in mind, these puts expire this Friday!
. . . . SPDR Oil & Gas Exploration & Production ETF $XOP September 18, 2015 $48 puts
$XOP is seeing renewed selling pressure today as the price of WTI declines to $51 a barrel. I hate to say it, but there’s a distinct chance $XOP breaks to $42 or lower before this bear raid is over.
Keep in mind, $XOP has achieved both our profit targets, so you should have taken most of your profits off the table here.
For you aggressive traders, our $48 puts are trading at a $5.25 bid, which is still a 101% gain from our entry. Keep holding any remaining put contracts you have for additional downside.
You never know, we could see an ugly collapse like we’re seeing in gold miners right now!
Category: Commodity Trading
