DCR update

My loyal reader Chuck e-mailed me last night and brought an interesting fact to my attention. If oil closes above $111 per barrel for 3 consecutive days the etf terminates and resets. I do remember reading something about this months ago but it slipped my mind. In my note last night I said that I was looking for entry prices and had not pulled the trigger yet. Bottom line,and based on this new information, the best way to play the actual commodity short if you are so inclined is to short USO. I would rather play it safe than sorry and frankly until this trade shows that it is topping out I will avoid for now anyway. It could be a real beauty on the short side when we time it right though. I want to thank Chuck for the awesome input.

DCR

I don't know how long oil will continue to make new highs here, but I am watching DCR (short oil etf) for an entry. I did well on this one the last time oil hit these levels. Keep it on the radar and I will give an update. Just returned from coaching little league so no charts. MIR acted very well today as it punched through the $38 level. Let's see if we can get a high volume follow through. See you in the morning. Tons of earnings this week and the financials were crap today.

Market In Turmoil

Plain ugly. What else can I say? It was always in the back of the minds of the perma bears that this day might come but none of them ever really thought it was possible. The Fed could do a one point cut next week but will it be viewed as a move of desperation? Remember Japan in the 90's and zero interst rates? That party didn't end well. We will see. The VIX or fear index finally moved above 31 for a 14% move today and traders I talk to are literally punch drunk at this point.
I took a very nice gain in SKF today(short financial) and USO is hopefully starting to go my way. I'm not using today as any gage for oil as some futures expired. I think next two weeks will be the test and I think there is a good shot at a meaningful nosedive. International leaders are meeting April 12th to bilaterally figure out a way to strengthen the dollar and I think as that gains traction in the market, commodities in general are due for a meaningful downturn. By the way that DCR trades nicely.

Tomorrow

We have CPI at 8:30. If the number is bad, the market tumbles. If the number is good the market will rise. But what if the number is bad and the market rises? A slim chance, but we could go 350 up on a short squeeze and it would signal to me that we have finally bottomed. The most likely scenario is that the number sucks and we go down. I'm throwing out crazy end games because in my opinion the market is still in no mans land.
I am still short OIL (USO) and have a bit of room left on my stop. I think it will tube, I just hope it's before my stop. Tomorrow is expiration for crude options so it should be volatile. I discovered another way to play oil short that is linked directly to West Texas Intermediate and it is DCR, an inverse play on oil,that is, when oil goes down,this goes up. Sometimes USO is hard to borrow and DUG for some reason doesn't exactly mirror the move in crude.The level I'll be watching, for a meaningful break on USO is $85.85 and then $84.70. I think we do a trap door from there.