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USO

THE WEEK AHEAD: IBM, SBUX, USO, OIH, XOP(Pulling hair out). Ugh. A tough market temporarily for premium sellers. With VIX caving in dramatically off of its late December greater-than-35 highs, premium selling is the old gray mare that (temporarily) just ain't what it used to be. That being said, there are a couple of potential earnings plays to be had next week: IBM (68/31; Tuesday after market close) and SBUX (67/27; Thursday after market close). As you can see by the background implied volatility metrics, well, they ain't great, with IBM coming in at 31 and SBUX at 27. That being said, the February to March implied volatility contraction in IBM at the moment appears to be potentially from 32.7% to 26.6% (23% or so), and the SBUX from 25.7% to 23.5% (9.4%). From that standpoint, IBM appears to be the better volatility contraction play, since the market's pricing in a bigger contraction in the "Watson AI" company than in the omnipresent coffee purveyor. However, if you're going to play Watson, you're going to have to deal with goofy five-wides in the monthlies which, in itself, makes the play unappealing. Using the weeklies for a more surgical approach gets you fairly wide markets. Again, unappealing. (Scratches IBM off his list). SBUX suffers from the same problem, but with two-and-a-half wides. I remember playing SBUX before, but don't recall having this two-and-half wide nonsense in the monthlies. (Scratches SBUX off his list, too). On the exchange-traded fund front, some implied volatility juice appears to be concentrated in the petros -- USO, OIH, and XOP, where it pretty much is to a lesser or greater degree all the time. This is why I pretty much have some kind of trade on and running in XOP almost all the time. (See Post Below for my current XOP trade). This isn't necessarily the greatest place to start a relationship with this underlying (the implied volatility's at the low end of its 52-week range), but it's not paying horribly. Due to its relatively small size (31.60 at Friday close), I like to short straddle it -- the March 15th 32 short straddle is paying 2.92 at the mid with a 25% max take profit .73, which beats a poke in the eye with a sharp stick. In light of the broad market volatility crush, this is just one of those weeks where I don't anticipate putting much on unless something dramatically changes or I stumble across something directional to play. Until then, I'll just sit on a bunch of dry powder, and it deploy it when the time comes.
CBOE:VIX
by NaughtyPines
Oil running directly into resistance - a quick short idea!This is an update of my oil call from a few weeks ago where I suggested an inverse head and shoulders pattern might turn oil around. I believe that the current fundamental environment for oil is favorable so I would not like to fight the trend on any long term basis, but I do believe we can make a quick trade as oil runs into overhead trendline resistance on the chart above. The breakdown line from the bearish wedge will likely serve as resistance and I would not be surprised to see a pull back before oil continues higher. For a quick trade: Short oil between $51.60 and $52 Target: $49.75 Stop: $52.30 (or grossly above the trendline above)
FX:USOILShort
by TradeWithAdam
3
Crude oil long opportunity USOIL WTICOUSD CL2!We have a long opportunity in crude oil now. Crude oil has been sitting at the 61.8% retrace around 45.40ish for the last couple of days. A study of the longer term cycles shows that we have just completed a corrective red zone which actually started in March 2018, this cycle reached a low in December 2018 and will reach its next high in June 2019. We are still in a green (bullish) longer term zone which started January 2016 and should end around July 2019. These cycles are represented by the different types of vertical lines on the charts. I believe after August 2019, we will have the chance to short oil once again. If the 61.8% retrace does fail, then we may see a drop to $36-40, so be careful. Stop loss 44.90 Short term target 51 Longer term targets range from 62 and up. This is not recommendation to buy or to sell. (see information about cycles at the DJIA links below)
FX:USOILLong
by cedarfox
2
USO - Neutral Iron CondorWith natural gas in play, opportunity here allows participation similar. Price extension to the downside should slow down & the neutrality should give room for risk management if directional assumption is wrong. 8/9/13.5/14.5 JAN19 IRON CONDOR @ 0.21 CREDIT General plan: Roll if necessary & if possible to reduce risk. Target maximum profit, unless significant profit appears early. Comment or direct message for discussion, or on other interesting ideas! Follow for updates.
AMEX:USO
by themdtrader
USOIL I Think We're Getting Close - Time & Price AnalysisMy best guess is the green highlighted area shouldn't be viewed as a "Bounce" zone. Instead, I think this will be the area where accumulation will take place. It'll take a few weeks and a few failed breakouts, so don't worry about missing the bottom. You'll have a few opportunities. ______________________________________________________________________________________________________________________________________ I've been working on "Time" more than "Price" for the last year. I got tired of pussy-footing around in my analysis; "It should bounce around this level, maybe it will maybe it won't." Time is much more elusive than price, but I'll give it a go: ______________________________________________________________________________________________________________________________________ Price: Between $49.00 and $46.00 a sideways to slightly lower accumulation zone will form in this range. (Typically don't like to give such a wide range ($3) but we just moved $27 in 7 weeks so giving myself some wiggle room) Time: From today (Nov 23rd) until Dec 15th, it's likely oil will be in accumulation as it moves sideways to slightly lower. By December 13th we should see some serious signs of a reversal. The reversal should last at a minimum until Jan 11th. Prior Oil Posts:
TVC:USOIL
by RHTrading
THE WEEK AHEAD: XOP, OIH, USO, XLE, UNG, EEMEarnings With >70 Rank/>50 Implied: No underlyings with highly liquid options with earnings announcements in the next week. With single names with earnings announcements in the rear view mirror, we're looking at earnings starting up again in the January cycle; I'd rather just play those closer to the announcement, rather than get caught up in a volatility expansion (e.g., CAT (84/40) with earnings in 53 vs. January opex 47 days until expiration). Exchange-Traded Funds With >50 Rank/>35 Implied XOP (81/44) OIH (81/43) USO (81/57) XLE (75/27) UNG (75/88) Notes: As you can see by the pictured setup, XOP is at the bottom of its 52-week range. With OPEC talks right around the corner (and likely jawboning to ensue), I'm slightly enamored with a bullish assumption setup here as compared to a nondirectional premium selling play, even though there's premium to be had (the Jan 18th 29/37 short strangle's paying 1.09 with a 70% probability of profit). Last week, I entered into a similar setup in OIH, (See Post Below), since it's gotten the sledge hammer to a greater degree than the rest of the petro-sensitive exchange traded funds. In any event, here are the metrics for the pictured play: Max Loss on Setup/Buying Power Effect: 4.02 debit/contract; Max Profit on Setup: 1.98/contract; Break Even on Setup: 33.02 vs. for a 6-wide, BE at 33.02 vs. 32.81 spot; Debit Paid/Spread Width Ratio: 67%. Look to roll the short call aspect out on significant loss of value (usually 50% max) and to take profit at 50% max (.99/$99 per contract). UNG has been pesky. I've looked at getting into a bearish assumption, seasonality-related short setup, but every time I look, the markets are stupid-wide, making it unattractive from an entry/exit perspective. Given its high rank/implied, however, it might be amenable to a bearishly skewed oppositional setup if you're willing to do a bit of price discovery and not settle for sub-mid price nonsense: the Jan 18th 27/46 short strangle is paying 2.92 at the mid with a net delta metric of =25.44 and break evens at 24.08 and 48.92, which covers a fairly huge swath of the 52-week range. If you're willing to spend a little more time in the trade, the April 18th 26/46 pays 4.91 at the mid, is =29.44 delta, and has break evens of 21.09 and 50.91, although I could see the reluctance to hang yourself out there undefined given the movement it's experienced over the last several weeks. Broad Market Exchange-Traded Funds Ranked By 30-Day Implied EEM 26 QQQ 24 IWM 20 SPY 18 EFA 18 Notes: The EEM Jan 18th 41 short straddle is paying 2.69; the ~30 delta, 39/43 short strangle pays 1.15. I've been working it via double diagonal with a short straddle body, just so I don't have to leg into and out of the long strangle aspect and to budget buying power devoted to the trade. (See Post Below).
AMEX:XOP
by NaughtyPines
2
Long Crude Oil For a BounceFor the first time in a long time crude oil is showing some strength. Beyond coming down to the psychological '50' level, crude oil is facing an OPEC meeting next week on Thursday. There is good reason to believe that output will be slowed and traders will likely position themselves ahead of that. You never want to catch a falling knife unless you have good reason to believe that it's done falling. In this case, I believe we do. Get long oil here at 52.10 with a stop at 50.20. I believe we won't run into resistance until around $56, but likely it is safer to take profits in the $55 range.
FX:USOILLong
by TradeWithAdam
2
DBC - More Odd Charts - Commodity Drop Underway?Crude oil has been getting absolutely walloped for weeks now, having lost over a third of its value recently. Looking at the chart of USOIL I recently posted, it seems to me we are definitely primed for a bounce. The bounce will ultimately fail, but we’re really, really oversold at this point. One thing I noticed is that the commodity ETF, symbol DBC, has actually cracked the channel which has been in place for years. Like I said above, I think oil will bounce, but I wouldn’t be surprised to see DBC hit resistance in the form of that now-broken channel. DBC is the basket of commodities
AMEX:DBCShort
by RHTrading
LONG UGA @ $28.50 for Gasoline Futures bounce from $1.64Gasoline Futures (RBOB Gasoline Futures) likely counter trend bounce here off 200weekSMA support at $1.66 to reclaim long-term moving average support of 50monthSMA at $1.70, then rally to test 100weekSMA resistance at $1.80. Technical Analysis: - Gasoline Futures (RBOB Gasoline Futures) now testing long-term support of 200weekSMA at $1.66. - $1.66 also strong price support from Feb 2018 for potential double bottom pattern - Daily & Weekly RSI extremely oversold - Daily MACD record lows - 50monthSMA long-term support sitting at $1.70 to continue uptrend from 2016 lows - Potential bottom hammer candle on hourly chart today at $1.66 Fundamental Analysis: Over recent weeks, we have seen an almost perfect bearish storm in the Crude Oil market that sent the price of futures from a high of $76 to low of $61, a decline of about 19% in less than one month. Rising production, increasing inventories, a strong dollar, concerns over trade, and the realization that the sanctions on Iran include some exceptions, all led the price of the energy commodity lower in a dramatic corrective move. These factors have had a greater impact on its bi-product Gasoline, which is also undergoing a seasonal bearish period during the winter months. However, we feel this move has been overextended to the downside as there are still 3 fundamental reasons why oil is close to low and could spark a counter trend rally in Gasoline. - Turmoil in the Middle East could result in a decrease in production and rapid price increase - OPEC expected to cut production at their bi-annual meeting Dec. 6th - Pullback of USD from highs due to US election results could relieve some of the bearish weight on commodity prices - Demand for the energy commodity remains strong with increasing population and rising heating oil cracks
NYMEX:RB1!Long
by CashFlo_Trading