Per Friday’s issue #324, you should have easily rolled forward your ProShares Ultra Bloomberg Crude Oil April 2016 $9 and $12 calls – to the July 2016 ProShares Ultra Bloomberg Crude Oil $10 call options (UCO160715C00010000).
The “roll” was well-timed, and gives you plenty of time to take advantage of the next leg up in oil, to the $50-$52 level. However, do note that we may first see a week or two of sideways action in oil, to slightly lower.
A few members have written in with the question: “Larry, if you are expecting sideways to slightly lower action for a few weeks in oil, then why not just get out of the options altogether, rather than rolling them forward only to sit on a depreciating asset …
And get back in when the time is right?”
My response is simply this:
A: Oil is in a new bull market. So any surprises we see will most likely be to the upside, rather than the downside. Therefore, stay long.
B. On Friday, oil elected a daily buy signal when it closed above $40.18, and I anticipated this signal, hence, another reason to stay long.
C. My models show a monthly buy signal within striking distance at $44.43. While oil is trading just under $40 right now … with over a week to go before the last day of trading this month, next Thursday, March 31 …
If that monthly buy signal is hit next week, then oil’s rally could simply continue without much of a pullback at all.
Now, let’s look at gold. Around 4 a.m. EST today, gold fell back to test the $1,245 level and is now hovering right around that pivot point.
My models show a choppy week for gold. But if it can close below $1,245 any day this week, then the decline should resume with an initial target at the $1,206 level followed by the $1,190 to $1,180 levels.
Bottom line: Hold your bearish gold and silver positions and your bearish mining position (DUST).
Hold all other positions and related stops, including IFN, which appears ready to make a nice run to the upside.
And stay tuned!
Larry
