Oil sitting right near its trendline. USO break below $38 is shortable. You can short now with a stop above $40. I would wait for a break below $38 because $40 is resistance and there is too much unrest in Iran making the headlines. Oil inventories tomorrow as well as CPI #s.USO is getting very close to coming down. There is a tiny gap from November that remains unfilled at $41.42. I originally thought (2 weeks ago) that USO would make a run for that gap making a false breakout, giving an excellent short entry though DTO or SCO.USO short is a no brainer. If you short it up there and are wrong, well then, we will be in a depression and it won't matter anyway. lol. My guess is that Obama will end the oil run somehow.
$42.60 and $50 are the two resistance levels above $40 for USO. I'd say shorting USO at $41.42 with stop at $42.70 would be a very nice way to play it. Of course, it still needs to get that high.
resistance after $50 is $69.It is really an argument of the dollar strength and Inflation/deflation. Everyone is screaming inflation but foreign nations bought our 30 year bonds without a blink of the eye last Thursday (that is deflationary). If you were a large foreign investor worried about inflation, you wouldn't buy 30 year bonds. Either that or they know something that we don't know. I think the dollar's ultimate low is in for several years and deflation has NOT ran its entire course. Therefore, oil is going down (eventually). I'd be surprised if USO gets back to $50 but then again its peak was $120.
--watch the dollar
--watch SPX
--watch oil
Subscribe to:
Post Comments (Atom)
On my Local news ( NBC) yesterday, they commented that UGA has reached the high for Los Angeles and should begin to pull back--It was a little 5 second blurb--Sometimes their little 5 second blurbs are exactly right. hmmmm.
ReplyDeleteI won't be here tomorrow--Monday --All day meeting with the book keeper.
ReplyDeleteShorting oil is abad idea
ReplyDelete