Weekly Update: September 18, 2013

| September 18, 2013

Weekly Update:  September 18, 2013


Commodity Watch:

Wow! What a day for the commodity markets…

Ben Bernanke shocked investors today by revealing the Fed will delay tapering operations until the US economy is on more stable footing. 

The unexpected news sent oil and precious metals soaring…

Gold surged 4.2%, silver exploded 5.6%, and oil rose 2.5%. 

Corn didn’t react much, but that’s due to mixed reports coming out of the USDA and Farm Service Agency over the past few days.  We’ll have to take a wait and see attitude with corn until we see a definitive trading opportunity.

Let’s get to our open trades in oil, natural gas, and silver…


Portfolio Recap:

. . . . US Oil Fund (USO) September 2013 $36 Puts

Our put trade in WTI crude is all but dead.  September option expiration is this Friday. With oil rising today, there’s essentially no chance of this trade turning positive.  We’ll have to chalk this one up in the loss column.

But be ready…

There’s another chance at oil market profits coming soon.  WTI crude is still fundamentally overpriced due to Middle East troubles.

. . . . US Natural Gas Fund (UNG) October 2013 $19 Calls

Natural gas is slowly but surely working its way higher.  The EIA inventory report released last Thursday came in slightly weaker than analyst estimates at 65 bcf.

Of course, tomorrow’s EIA reading will steer natural gas trading for the next few days.  With temperatures cooling across the US, there’s a growing chance inventories will come in on the high side this week.  

Let’s keep holding the UNG October $19 calls for the time being…

. . . . iShares Silver Trust (SLV) October 2013 $22 Calls

Silver was the largest commodity gainer in today’s trading session.  The metal surged 5.6% on news the Fed will delay tapering.  The explosive move pushed the SLV $22 calls we opened yesterday to a gain of 120%. 

Not bad for one day’s work!

Now, whatever you do, don’t sell these calls yet.  Silver is poised to jump much higher in coming weeks.  That means we’ll likely see much larger gains from this trade in the near future!


Category: Commodity Trading