Issue #154
| For all subscribers: For each $25,000 in equity you are trading …
1. Buy 100 shares of United States Natural Gas Fund LP, symbol UNG, at the market and place a protective sell stop at $17.50 stop, good till cancelled. 2. Buy 300 shares of ENSERVCO Corporation, symbol ENSV, at $3.40 or better. This order is good till cancelled. Note: I will be monitoring a risk-reduction stop for you on ENSV. |
Dear Member,
As you know from my recent webinar, I’ve been keeping a close watch on the energy markets, waiting patiently for the right opportunity. For one market the wait is over ― the price of natural gas appears ready to soon soar higher. And a great way to invest in natural gas is through ETFs.
Therefore, I recommend all subscribers act on the above alert as soon as possible and purchase the United States Natural Gas Fund LP (UNG) at the market.
It’s not just the price of natural gas going higher: Companies that help keep the supply of natural gas coming out of the ground will also see higher prices ahead.
That’s why I am also recommending you purchase shares of a small North American oil fields service provider, ENSERVCO Corp. (ENSV).
ENSV is one of the leading providers of fluid-related services to the U.S. onshore oil and gas production industry. From drilling and fracking-related services to well maintenance programs, ENSERVCO provides round-the-clock fluid-related work to a number of large and small U.S. energy companies operating in seven of the nation’s largest oil and gas regions.
The bottom line is this: The selling pressure that has recently weighed on the energy markets has subsided. Now, some great opportunities are waiting for you on the long side.
So it’s time to get long UNG and ride the next wave of higher natural gas prices and at the same time add a long position on a small relatively-unknown oil fields service provider.
Please act on the above orders as soon as possible and be sure to enter the protective stop on UNG.
Do not chase the market for ENSV. Stick with the limit price recommended. If filled, I will monitor ENSV for a risk-reduction stop and also look to tighten the stop on UNG to reduce risk further as more trading action unfolds.
Naturally, if ENSV is not filled, I will advise what to do as well.
Now, on to gold and silver: As I noted in my last issue, the precious metals are in the doldrums.
Moreover, it is now do or die time for the metals. Either they start to rally soon, or there’s a very real chance that a bear market will resume, which will take gold and silver to new bear market lows for the past three years.
That said, all of my indicators continue to suggest a rally is imminent. So I want you to hold tight to your mining shares, and if the rally begins soon, I may even recommend adding to positions.
But right now, you have to be a bit more patient.
Here are the three possible scenarios for gold, silver and mining shares:
Scenario #1: A rally soon begins, taking gold up to key resistance at the $1,400 level and silver to roughly $22.
If that is what unfolds, then the new bull market will be confirmed.
Scenario #2: A rally soon begins, taking gold and silver up, but only to minor resistance at the $1,340 and $21 levels respectively, then the rally fails.
If this scenario unfolds, then it is likely that the bear will return, and gold and silver will fall to new lows heading into January of next year.
Scenario #3: Gold and silver continue to trade sideways a bit longer, then slide further with gold cracking the $1,240 level.
If this scenario unfolds, then the bear will have the upper hand, and, like Scenario #2 above, we will see new lows come January of next year, likely down below $1,100 in gold and below $17 in silver.
My indicators, as I just noted, suggest Scenario #1 is still on the table. But it is truly impossible to say with any certainty.
I can, however, tell you this: If the path for the precious metals turns out to be either Scenario #2 or #3 ― with a bear market eventually returning ― you will have plenty of opportunities to profit from the downside potential.
Frustrating? You bet it is. But the important point to realize is this: My very conservative posture toward gold and silver and mining shares has actually served you well. I know many traders who have been chopped to pieces in the metals and in mining shares lately and you were not part of that.
So I am very happy that you have not gone full in yet, and despite some small losses on both recent closed positions and your open positions, your ammo has been kept largely intact. That is going to serve you well, no matter what direction the metals (and mining shares) ultimately take over the next few months.
Please also note that if, by chance, the bear markets in gold, silver and mining shares do return, I do not see them extending beyond January 2015.
In other words, I am NOT talking about long-term bear markets resuming, nor ones that would see gold, for instance, fall all the way back to say, $800 or lower. That is NOT in the cards, period.
For now, hold your metals-related positions and mining shares with your protective stops in place.
And act on the above new trades as soon as possible.
Best wishes,
Larry
