Proshares Ultra Crude Oil Update 7-14-11

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WTI Crude Oil again came close to testing $100 level. Having rallied off of Bernanke's comments yesterday of a possible QE3 monetary easing, but dashed today as Bernanke back peddled in front of the Senate. Risk On-Risk Off Whipsaw Markets. Itz was stopped out of Proshares Ultra Crude Oil (UCO) the other day @ $42.50 with a $2.25 profit. At the moment it's probably best to stay on the sidelines and trying to either long or short oil near term is just way too volatile. There's just too much political and global events pressuring traders. Longer term ITZ continues to see energy trend higher into 2012.

Below is a daily UCO chart: ITZ observation shows a possible Bearish Engulfing Pattern...need to see how tomorrow plays out...
Description: The first two days forms a Bearish Engulfing Pattern, and the third day confirms the reversal suggested by the Bearish Engulfing Pattern since it is a black candlestick closing with a new low for the three days.

Past Itz Posts

Crude Oil Update : Proshares UCO

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Oil market volatility rose sharply after the release of inventory data from the U.S. Energy Information Administration, sending the CBOE's oil volatility index out of a narrow trading range to hit a high of 43.8 percent. In addition to the surprise build in gasoline inventories, the first rise in stocks after 11 consecutive declines, the EIA report showed a large rise in crude oil stockpiles as gasoline demand continued to trail year-ago levels.

The underlying fundamentals haven't changed enough to see this kind of price change. This market is on edge.

Gasoline futures hit the New York Mercantile Exchange’s floor on price drops Wednesday, triggering a brief but unusual halt in oil and gasoline futures trading, and prompting the exchange to allow for even deeper losses. Read Story

Itz Pix is long oil via Proshares Ultra Crude Oil (UCO) and believes one should be a buyer of this decline. That said, make sure you limit any losses, maintain STOP on UCO @ $45. Cost Basis $49.08. Follow ITZ on Twitter for current updates and charts. Link to past posts

David Greenberg, of Greenberg Capital, discusses why the CME is raising oil margins with one hand, and increasing trading range with the other.

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