Posts Tagged ‘USO’
Strategic Assassinations May Keep Iran Nuke-Free, Send Oil Lower
January 11, 2012
For years, media have reported on a number of military options to bomb Iran’s nuclear facilities. Iran has learned from the 1981 bombing of Iraq’s nuclear facility. Nuclear facilities in Iran are widely distributed and most of them are built deep underground.
Some of these facilities are believed to be beyond the reach of the best U.S. bunker buster bombs, and it is not clear whether Israel possesses bombs that can penetrate reinforced subterranean targets.
Has Israel instead found a low-cost and effective way to contain Iran’s nuclear ambitions?
Iranian news agency FARS is quoting Safar Ali Baratlou, Tehran Province Security chief: “The bomb was a magnetic bomb similar to the bombs that were earlier used for the assassination of (the Iranian) scientists and actually the job was done by the Zionists. Zionists seem to be trying to create a security atmosphere in Iran on the threshold of (parliamentary) elections to decrease the people’ turnout in the polls.”
Lately, tensions with Iran have heated up as Iran has threatened to block the Strait of Hormuz. Most oil from the Middle East to the Western world is shipped through Strait of Hormuz, which is 21 miles across at its narrowest point. The shipping lane is only two miles wide in each direction with a two-mile buffer zone in between. The narrowness of the lane makes it easy for Iran to block it. Iran is on the recorded stating that if attacked it will block Strait of Hormuz…Read More at Forbes
Tags: DRAGHI CHANGES THE GAME FOR STOCKS, GOLD, SILVER AND OIL
November 5, 2011
It turns out that Mario Draghi is Super Mario. Mario Draghi is an ex-central bank governor of Italy who just took over from Jean-Claude Trichet the presidency of the European Central Bank (ECB).
In a surprise bold move, Draghi announced that the ECB is lowering its main rate from 1.5% to 1.25%. This rate cut will either avert the looming recession from Europe, or make the recession milder.
This cut in interest rate came despite inflation in the eurozone at 3%, which is a three-year high. Draghi’s predecessor Trichet saw the ECB’s mandate as controlling inflation irrespective of the economic slump. Inference from the bold action by Draghi is that a major shift in policy in Europe is occurring. It appears that finally monetary authorities are about to give priority to growth.
Considering that eurozone is a major part of the world economy, Super Mario has changed the game for stocks, gold, silver, oil and currencies.
The following are the actions we are recommending:
- Take profits on a short silver position. Prior to the announcement, our models had just given a signal to add to the short silver position and were close to giving a short signal on gold.
- After plugging in the rate cut, we are no longer inclined to short sell silver and gold. If there is a big dip in silver and gold, and all six screens of the ZYX Change Method are met that may be a time to buy gold and silver.
ETFs of interest include GLD, IAU, SLV, GLL and ZSL….Read More
TAKING PROFITS ON THE LOW RISK OIL TRADE: UNITED STATES OIL FUND LP (USO) AND UNITED STATES BRENT OIL FUND (BNO)
October 25, 2011
We have just closed a very profitable trade on crude oil in the ZYX Short Sell Change Alert. The trade involved a spread between United States Oil Fund LP (USO) and United States Brent Oil Fund (BNO). Following are two relivant posts from the Real Time Feed of the ZYX Short Sell Change Alert:
LETS UNDERSTAND USO AND BNO TRADE
BNO, which represents Brent crude is primarily used in Europe. Libya is a big producer of Brent crude. When the rebellion in Libya started, Brent crude prices rocketed. Now that Libyan crisis is coming to an end we expect Brent crude prices to fall.
The reason Brent crude prices have not fallen quickly in the recent days is because of the reports that there is significant damage to the oil infrastructure in Libya. Our analysis and resources dictate that the foregoing conclusion is wrong.
Our analysis shows that Libya will start producing over 1 million barrels a day in a matter of months. We were content with out small short position in BNO and were planning to add to it until we scrutinized Bernanke’s speech in Jackson Hole last Friday. Bernanke obviously has better data than we do, so we have to respect his conclusion.
We analyse economic data from 23 countries. The data shows that the growth in emerging markets is slowing, but Bernanke indicated that the growth in emerging markets is not slowing.
If the growth in emerging markets picks up, oil prices will go higher.
Out of six ZYX Change Method screens, two are positive on oil, two are negative on oil and two are neutral. Therefore, we are not ready to take a directional position on oil in general.
But to reduce risk in BNO position going against us, we will hedge it with USO. We expect the spread between BNO and USO to narrow. If we are right, we will make money on the trade irrespective of the overall position of oil.
Please understand that we are not recommending a buy on USO as a directional trade.
Our preference is to enter the USO hedge at a lower price, preferably around $32.50 or on upside break of $35.10. But the market is very volatile and we will need to keep a close watch on it.
TAKING PROFITS ON USO BNO SPREAD
This trade has worked out very well, now it is time to take profits and exit the trade. The chart shows how the two instruments have behaved — just like our prediction. USO is at $36.27 and BNo is at $ 76.06 as of this writing. This position is now exited and will no longer be followed.
TAKE PROFITS ON BRENT CRUDE (BZ) (USO)
September 28, 2011
It is time to take profits on Brent crude (BZ) (USO) right here at $103.05.
In ZYX Short Sell Change Alert continue to hold a spread position between Brent crude and West Texas intermediate for much larger gains to come.
SHORT SELLING OIL (USO, BNO, BZ)
August 22, 2011
BNO is an ETF representing Brent crude oil. This is the type of crude oil produced in Libya. With a resolution of civil war in Libya, BNO is likely to come down.
We are staring a 5% tranche right here at $71.73. Our plan is to short more if BNO goes higher. Due to high volatility, we will not temporarily put a stop and will rely on keeping the quantity small as a measure of risk control.
We are also short selling BZ futures at $109.
Please note we are not shorting USO.
Updates are available on these positions in real-time on the Real Time Feed of the ZYX Short Sell Change Alert.
zyx change method http://thearorareport.com/sub http://www.google.com/finance?q=slgn Updates are available on this position in real-time on the Real Time Feed of the ZYX Buy Change Alert.
