First, you should be filled on last week’s order to buy another 2.5% position in ProShares UltraShort Euro (EUO). Fantastic!
Your timing could not be better for pressing your bullish bets on the U.S. dollar, especially as a short-squeeze in the buck kicks in.
A stronger-than-forecast read on U.S. Retail Sales gives the Fed reason to take a more hawkish monetary policy stance – via balance sheet normalization and further interest rate hikes – that’s dollar bullish relative to the euro.
Second, you’re not filled on your sell order to exit Direxion Daily Junior Gold Miners Index Bull 3x Shares (JNUG) at $18.88, but keep working your order. We see a high probability for a rally this week, which should reach our price target. But if not, we’ll be sure to let you know if you should adjust the sell-limit price.
Third, you were stopped out of your long position in AK Steel Holding Corp. (AKS) for a loss. That’s disappointing, but it’s taking far longer than expected for the Trump administration to get its act together on fair steel trade practices, and the infrastructure spending plan. That should eventually lift steel stocks.
But it’s not yet time, so instead, deploy those funds in a new buying opportunity with more immediate upside potential – natural gas.
Higher natural gas prices dead ahead …
Like the oil market, natural gas is working through excessive supply. But we think much of that is factored into extremely depressed prices. And that creates a buying opportunity for the following reasons…
Bullish Force #1: The National Oceanic and Atmospheric Administration (NOAA) upped their forecast for this year’s Atlantic Hurricane forecast. They’re now calling for 14 to 19 storms, compared to the average season of 12.
Greater storm activity raises the chances of supply disruptions to Gulf of Mexico oil and gas operations. It also poses more risk to key pipeline infrastructure, causing supply dislocations that are worthy of boosting natural gas prices.
Bullish Force #2: Hotter U.S. temperatures to lift power generation demand.
Near-term weather forecasts call for above normal temperatures across Illinois and California that will increase air-conditioning demand. Ditto for the Eastern and central U.S. in the later part of August.
More cooling demand from air-conditioner use increases consumption of natural gas used in power generation. A catalyst worthy of lifting natural gas prices higher.
Bullish Force #3: The positive price outlook for natural gas is confirmed by our E-Wave cycle forecast, which points to a substantial upside into early October. Take a look:
We recommend using ProShares Ultra Bloomberg Natural Gas (BOIL) to take advantage of higher natural gas prices.
Here are the instructions:
Using 2.5% of the funds you have allocated to this service, buy to open the ProShares Ultra Bloomberg Natural Gas, symbol BOIL, at $9.10 or better. This order is good-till-canceled. IF and WHEN filled, immediately place a new good-till-canceled protective sell-stop on all of your shares of BOIL at $7.89.
We’ll monitor risk on the position for you.
Quick update on Oct. HD puts …
Home Depot (HD) reported earnings today and once again beat analyst estimates for the 18th straight quarter … but the beat was widely expected and fully priced into the stock already.
That’s why HD is plunging 3% this morning as we pen this issue, bringing your October HD puts right back into profitable range. HD has a habit of beating earnings expectations AND selling off on the good news anyway, just as our cycles forecast. Look for an extension of the sell-off in the days ahead, with more upside for your puts. Stay tuned.
Get the BOIL buy order in to your broker right away. Hold all other positions and stay tuned for new trade alerts and updates coming your way soon.
Good investing,
Mike and David
