Sean’s Rant

I called this bull market in oil. Heres my post when oil was at $35/barrel. I am not as bullish on it now because of the massive run up we have seen. I still see it going up in the long run but there has got to be a correction because the supply funadmentals still don’t support the bullish action. There is still way too much oil sitting around for it to be at these levels. I wouldn’t necessarily short oil but I would wait for a bit to buy more of it and you can do this with USO.

Gold has skyrocketed and oil has dropped like a rock in the last few months, in case you were in a closet.

Here’s why I am long oil (USO) and am getting longer on dips:

I’m LUV’n my USO (US Oil) right now. It could be a good time to sell it again, like the last time I sold it and it went down 10% the next day, wohoo…. but its still a great long term play so I’m holding it. 

Not necessarily. USO still has upside. It might experience some short term profit taking, along with the rest of the market, but this is a great hold until oil gets to about $60/barrel. At that point it could hit a trading range and could trade sideways for a while, but we’re still at $46, so hold onto it. I recommended keeping an eye on this ETF back on November 30 and I got into it when oil was at $37. If oil goes down again, jump into it. 

Yes I’m still here. I have held off from making any projections because the market has gotten weird. The trading volume is low, the market isn’t really reacting to data, but in the mean time I did make a great trade on USO. I was early on this trade but right on when I jumped in for more when it dropped down more. I am still waiting for my SRS to play out. 

If you look at the track record of market behavior around this time of year, the recent rally represents the trend upward the last week of November. Also, we had just had a large downtrend, allowing for a large rally. We will likely see a down week of -500 points or more unless some major good news comes out, like the recent statement of Treasury Chairman Paulson to make a massive capital infusion which almost immediately lowered Mortgage rates. The day that this was announced the market was basically flat. This is because the market was due for a downturn to balance out some of the rally it had just experienced. When Paulson made this massively bullish news, it balanced out the activity for the day and left the market essentially flat.