Focus on oil ETFs and ETNs this week.

The unrest in Libya continues and actually escalated even further due to the international military intervention. This got to have a severe impact on oil prices, that I'm going to keep a close eye on this upcoming trading week.
Japanese markets seem to have stabilized a bit because of the decrease of nuclear threat levels, so it's all oil for me this week. Therefore I'm putting my focus on oil ETFs and ETNs. The biggest one of them all being '^OIL' (ETN) and ^USO (ETF).

Let's take a look at the charts;

Given the fact the ^OIL reached $28.36 (and that was before the international community decided to intervene in Libya) there is a good chance that rising oil prices could occur this upcoming week.

Same goes for the ETF ^USO which could turn out to be even more volatile, I expect it to break through 42 levels upcoming trading week, by Fridays closing; a perfect opportunity to take a in-the-money call option for 42 for March 25th. 

I highlighted 42.00 (interestingly enough the option with the highest open interest)

Other Oil ETFs/ETNs

• United States Oil Fund (USO)   
• FactorShares 2X Oil Bull/S&P 500 Bear ETF (FOL)    
• Goldman Sachs Crude Oil Total Return ETN (OIL)
• PowerShares DB Crude Oil Double Short ETN (DTO)
• PowerShares DB Crude Oil Long ETN (OLO)
• PowerShares DB Crude Oil Short ETN (SZO)
• PowerShares DB Oil Fund (DBO)
• ProShares Ultra DJ-AIG Crude Oil ETF (UCO)
• ProShares UltraShort DJ-AIG Crude Oil ETF (SCO)
• Teucrium WTI Crude Oil Fund (CRUD)   
• United States 12 Month Oil Fund (USL)
• United States Brent Oil Fund (BNO)
• United States Heating Oil Fund (UHN)
• United States Short Oil Fund (DNO)

Focus on OIL this week: Recap

This is a follow up post of the article I posted on Monday this week, if you haven't read it yet just scroll down or click the link. (Focus on OIL this week).
In it I gave the ETN a buy recommendation and for those of you who have done so have pretty nice results at the moment. In fact I recommend you to hold on to it even a few more weeks because the price of oil is heading to over $100 a barrel and stay there for awhile, I'll elaborate on this further in the end of the post. Let's now take a look at the updated chart I posted on Monday today;

The intra week chart for this commodity tracker looks like this;

The trade recommendation was given at $23.89, now at $26.20 for the week, that's a nice profit! A simple aggressive out-of-the-money $24 call option (the one I recommended and took myself)  amplifies the trading profits even more. One more reason to follow VDM Trading :)

What I mean to say by this is that most articles I post on this blog are 'high probability' trades. If they are I will state they are, and one more reason to keep your eyes open on the trade given. I admit, I'm not always right, but when I'm not, I narrow my losses and but when I'm right I extent my profits. And that's what trading should be, consistent profitable trades. You can't be always right, but when you are make sure you get the most out of it.

I got to say, this was a relatively easy one. 

Middle-east in the traders mind is automatically linked to oil, and when unrest brakes out the price (market price) of oil tends to spike by speculators. The actual price of oil (the intrinsic value) stays pretty much the same. But that's not what the boards reflect. The trading boards reflect speculating sadly enough, I say sadly because a lot of people will suffer from rising prices at the pump. 

Even though it's a known fact that Libya produces only 2% of the worlds oil supply and most of it is going to Europe, it still seems to have a huge impact on the US economy. Higher oil prices automatically domino effects to higher gas prices at the pump here in the US which then results in a drag on the US economy as a whole since every dollar Americans spend at the pump can't be spend elsewhere. It's all one big mess, but in my opinion a very predictable mess, a reason why this trade came up. 

Sometimes all it takes is to watch the news and a little common sense to come up with extremely high profitable trades.

Like always, if I see other potential trade developments emerging, this blog is the first one to know it!