Saturday, August 24, 2013

ITZ Weekend Update: Crude Oil, Gold & Silver

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Defense Secretary Chuck Hagel suggested Friday that the Pentagon was moving naval forces closer to Syria in preparation for a possible decision by President Obama to order military strikes. Read more:

Expect crude to possibly break above 108/109 resistance on fears that U.S. intervention in Syria will stoke further conflict in the oil-rich Middle East. While Syria isn't a major oil producer, investors fear that the two-year-old civil war could spill over to affect oil supplies in nearby countries.
Also what will be the response from Russia and Iran, they may step up their involvement.  Russia recently rejected the U.S. government's evidence of chemical weapons used in the Syrian civil war, calling it "unconvincing."
ITZ is long Proshares Ultra Short Crude (SCO) having entered on 6/29 $35.80; 7/2 $34 & 7/3 $33 as a hedge. The Commitment of Traders chart as highlighted over last several weeks showed a decrease in net short position by commercials recently. see charts

For now ITZ will remain in the position, but a break over $109 on any escalation in Syria by U.S. military & ITZ will exit SCO.

Gold rose 1.9 percent on Friday, hitting its highest price in more than two months near $1,400 an ounce, as a big drop in U.S. new home sales renewed hopes that the Federal Reserve will maintain its bond-buying economic stimulus and geopolitical tensions also added to the move.

Silver outperformed gold to rally nearly 4 percent to a 3 1/2-month high as the dollar fell and U.S. Treasury bond yields dropped. It also rose above the $24 mark for the first time since May 9.
 Silver Wheaton (SLW) has rallied nicely and ITZ sees further upside.


itzstockchartz said...

ITZ will exit Proshares Ultra Short Crude Oil (SCO) as WTI crude breaks above resistance @ $109 as mentioned in above report.

ITZ average cost basis for SCO is $34.65

The geopolitical escalation in Syria with U.S. military action eminent, has pushed Brent and WTI oil higher. ITZ will step aside, for now and look to re-enter the short crude oil position as events unfold.

itzstockchartz said...

SCO exit price $27.35 - cost $34.65 = 7.30 loss for a 21% loss. Again, SCO was used as a hedge. ITZ will look to reenter. Hopefully may of you also entered the Silver Wheaton (SLW) position and are off setting the loss with a 60%+ gain, again there use a trailing stop.

itzstockchartz said...

Placing Stops on $SLW position sell 1/2 using 8-ema trailing stop, & other half using 21-ema trailing stop.

itzstockchartz said...

exited 1/2 @ $27 for +50% gain

itzstockchartz said...

Update: let's use 13-ema as a trailing stop on $SLW remaining 1/2 position around $26

itzstockchartz said...

$SLW hit 13-ema stop $26.13 - $18 for +8.13 net +45%