Friday, January 30, 2009

Punting Crude Long

The time has come to have a look at crude. I like to do this via the USO (chart above). We have a series of higher lows, which some could argue look extremely anemic and I would agree. But what has caught my eye is the volume, which has surged substantially as we have bumped along since the start of January. This heavy volume should help serve as a defensible line in the sand for me which I shall use as my stop loss point should it be violated to the downside. I am most definitely early here but the risk/reward of this trade looks very compelling.

The proshares ultra crude, ticker UCO (chart above) is my preferred vehicle to get long crude which I am this morning. I have included a link so those who are unfamiliar with proshares and in particular UCO can get acquainted.

I am getting long here 1 unit of UCO at $10.50 with a stop at $9.38

Good speculating to you all and never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 2 units Ultrashort MSCI EAFE ticker EFU @ $89.80 stop at $89.80
Long 2 units Ultrashort S&P500 ticker SDS @ $69.80 stop @ $66.15
Long 1 unit Ultrashort Real Estate ticker SRS @ $51.30 stop @ $47.18
Long 1 unit Ultra Crude ticker UCO @ $10.60 stop @ $9.38
Short 1 unit Darden ticker DRI @ $27.70 stop @ $28.70
Short 1 unit Wells Fargo ticker WFC @ $20.20 stop @ $22.43
Short 1 unit JP Morgan ticker JPM @ $27.35 stop @ $29.54
Short 2 units of Apollo ticker APOL @ $83.40 stop @ $86.31
Short 2 units Morgan Stanley ticker MS @ $21.30 stop @ $23.82

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