Is oil rolling over? Itz has been targeting $90 per barrel, but today on CNBC Gulf Oil CEO Petrowski, pointed out that he is concerned that gallons transaction is down, sighting that the consumer is stressed and that this economy is running out of steam. Itz has pointed out over the last several blog reports that gold was breaking out of an Inverse Head & Shoulders pattern. Even today the GLD broke resistance (see chart) It looks very likely that traders are getting concerned and maybe hedging as oil nears $90, Dow 11,000 & the S&P 500 1200. Rotation is out of oil into precious metals, could a break higher in the equity indexes spur another leg up? Depends...which side of the trade will you be on?
So what to do? Itz has been recommending selling out of the money covered calls, suggesting May expirations. Another suggestion is buying the Proshares inverse oil ETF 'DUG' around $11. Below are a few charts and the gold/oil ratios using the $GOLD:$WTIC as well as the GLD:USO. Bottomline stay long gold & silver hedge oil positions.
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