Issue #186
Gold rally still shaping up. Stocks nearing another top. Oil bounce
should be over. NEW TRADE: Pull trigger on a bearish oil position.
Dear Member,
Effective immediately, you will now find the trade table in the body copy of the issue. Reason: I find it much better to talk to you first about what’s happening in the markets and any open positions before introducing a new recommendation to you.
I’m sure you’ll find it much better as well.
That said, let’s get to the markets. Wow, have they been whipping around!
That’s to be expected. Naturally, there will be some slow periods, but overall, this year is shaping up to be one of the wildest on record.
Let’s start with gold. Short term it is still set up for one more pop to the upside, pivoting around the support level I previously mentioned at the $1,268 level.
I hope to capitalize on that next pop higher with the long position in PowerShares DB Gold Double Long ETN (DGP) as well as your shares in Kinross Gold (KGC).
Hold DGP and KGC, and maintain protective sell stops at $24.54 and $2.89, respectively.
Next, the stock market. Despite its recent rally attempts, all signs and signals point lower, in a choppy, struggling decline that could ultimately see the Dow reach as low as 14,300.
Therefore, hold your shares in Direxion Daily S&P 500 Bear 3X ETF (SPXS), maintain a protective sell stop for the position at $19.39, good till cancelled.
Now, on to my new recommendation: Many believe the price of oil has bottomed, all due to its recent bounce back above $50 a barrel. But according to my work, nothing could be further from the truth.
Not only do my system models remain bearish, but here’s what I am also looking at chart-wise:
Oil’s bounce failed to meet overhead system resistance, and now, it’s back down, penetrating support.
That makes for a good, low risk trade taking out a bearish position on oil. Note on the stop below: Place it as your initial stop, but I will be looking to raise that stop as soon as possible.
Here are the details of the new recommendation:
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For every $25,000 you are trading in this service: Buy 100 shares of ProShares UltraShort Bloomberg Crude Oil, symbol SCO, at the market. Place a good till cancelled protective sell stop at $68.98. |
Best wishes and stay tuned …
Larry
