This post was just published on ZYX Buy Change Alert.
CONGRATULATIONS TO THOSE WHO FOLLOWED INTELLIGENCE ON OIL, OIL JUMPS ON COMMENTS BY RUSSIA’S NOVAK, WHAT TO DO NOW?
Congratulations to those aggressive investors who followed the Intelligence we provided on oil. Such traders may have a tranche as low as $7.92 and several tranches from the $8 range.
We provided a target zone of $9.50 to $10.18. This morning USO hit a high of $9.86. Most subscribers should have taken profits and exited this trade.
One plan to consider is to start lightly scaling in again on a dip in WTI contract CLH6 in the zone of $29.43 to $33.13 preferably below $32.36.
As written previously, all but the most experienced traders may consider not using futures due to high volatility and focus on scaling in on small tranches using ETF USO.
Oil has jumped on comments by Alexander Novak, Energy Minister of Russia. He is saying that Saudi Arabia had proposed a 5% production cut. On the news oil jumped over $34.75, then oil backed off under $33 for the following four reasons.
- It is not clear if these comments from Russia are recent or old.
- Given different objectives of Russia and Saudi Arabia in Syria, reaching agreement between these two countries is not going to be easy.
- Iranian oil is still coming on board.
- According to our algorithms, the overhead supply of oil for sale is still not exhausted.
TAKE MORE PARTIAL PROFITS ON SCO HEDGE
SCO hedge is from $25.87. As of this writing it is trading at $162. Back in 2014, we called for hedging 5% of the portfolio with inverse ETF SCO for the very long-term.
There are huge profits on this hedge. Profits have been taken as high as $218.43. Consider taking partial profits on another 5% of the SCO position in the zone of $160.00 to $184.50.
Consider continuing to hold the remaining 35% of the position.
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