Category Archives: Commodities

Cracking a Crude Smile

By -

Well, I’m back from a family trip to Denver, where we had a successful fencing tournament. I am heartened, now that I am back in front of my computer screens around midnight on Sunday, to see commodities continue to crash and burn. To my way of thinking, commodities represent the unvarnished truth about the world economy, far more germane than, oh, say, Facebook, Amazon, Netflix, or Google (just to grab four names out of the air).


Weather Report (by Bob Kudla)

By -

Ever since the Fed quit QE, the market has been oscillating based on OPEX. Many sites have been remarking on this as of late (so probably will not work this month) but technical patterns, seasonal s, and trend-lines suggest we take the trade short. Also, it looks likely that the market has readjusted back to levels prior to the we are going to raise rates meeting. Now what, back into the old rectangle, or as I think we are now in this new lower rectangle.

I am short ES and Biotech, but there are many ways to play this whether you are a conservative or aggressive trader.


Commodities Resistance?

By -

Well, October has sucked out loud for me so far. Equities and commodities are surging (just as DG predicted………incredible!). Not to hang my hopes on too thin a reed, but I at least wanted to point out that the commodity ETF, symbol DBC, is at the top of its two-month range at a level that, for the third time, has represented resistance. We’ll see if we fall or break from here. Oil will be the deciding factor.


A Lower-Risk Way To Bet Against Oil

By -

Our Highest-Ranked ETF is a Bet Against Oil – And The Global Economy

Each trading day, Portfolio Armor calculates potential returns for every security with options traded on it in the U.S. Potential returns are high-end estimates of how the security might perform over the next six months, and they’re based on an analysis of price history and on option market sentiment. On Friday, the security with the 5th highest potential return in our universe (which consists of all securities with options traded on them in the U.S.) was the ProShares Ultra Short Bloomberg Crude Oil ETF (SCO), which is 2x short oil.

SCO had a potential return of 19%, which was 5th overall, but the highest of any ETF in our system. Here’s a way an investor who wants to bet against oil (and, by extension, much of the global economy) can own SCO while limiting his downside risk to a decline of no more than 15% if SCO moves against him. The best part is, the cost of this hedge is negative, so our investor would essentially be getting paid to hedge.

Getting Paid To Hedge SCO (more…)