Tag Archives: RSX

A Slippery Inflection Point

On the back of falling rig counts and a technical oversold bounce oil has staged a vigorous two-week rally, climbing 22% off its 5 year lows of $43.58 on January 28. Bears are calling for a continued downtrend with this recent move being only a dead-cat bounce, whereas bulls find encouragement in the price holding above $50 for the first time in weeks. Personally I would enjoy an extended period of cheaper gas as prices at the pump have jumped correspondingly in the last couple of weeks, and it would also give me the opportunity to pick up some beaten down oil majors paying fat dividends, like CVX, TOT, or the XLE ETF. Junior oils have also staged a breathtaking surge in plays like OAS and GDP, as well the XOP ETF. Another interesting ticker to watch is FCG , tracking oil & gas producers and explorers (holdings here) and its 3x leveraged cousin GASL, which have bounced sharply after hitting all-time lows recently. The energy sector has lifted broader indices in US markets, and has also thrown a lifeline to the ailing Russian market as shown by the strength in RSX, RUSL. A strengthening ruble has also helped. DWTI and UWTI are still trending and in play with this oil volatility still at the forefront.

As always, trade well and stay disciplined!

 

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Setting The Tone For The Year

Welcome back! Hope you had an enjoyable holiday with your loved ones and got some well-deserved rest and relaxation. Markets got off to a choppy start to the new year after a rough finish to 2014, with the Dow finishing barely in the green after an early 100+ point pop that quickly fizzled out, while both the Nasdaq and S&P 500 closed red on the first trading day of 2015. Amidst the volatility gold managed to stage a modest rally on Friday, but still under the $1,200 level, with miners GDX and juniors GDXJ ending strongly up on the week. Natural gas  continued to crumble with an EIA draw of -26bcf, well below expectations of -38bcf despite colder weather forecasts. Futures closed below $3 for the second time on Friday despite a strong morning rally that held above $3 most of the morning but was abruptly cut in half with a massive plunge back below by 14:25ET. The triple-leveraged UGAZ and DGAZ ETFs have been trending the past few weeks on StockTwits, with UGAZ losing more than 75% of its value in just over a month! Conversely, DGAZ has more than doubled over the same period.

Russian markets have been closed this week since Dec. 30th and reopen on Monday, but with another holiday on Jan. 7th. This has not stopped traders from making bets on the RSX Russia ETF as well as its triple leveraged cousins RUSL and RUSS, which have seen a wild ride tracking the volatile movements in crude oil and the ruble, both of which have resumed their downtrend.

The first full trading week of 2015 should set a more decisive tone for the short term, with some key economic releases including jobs data Wednesday through Friday, as well as the FOMC minutes on Wednesday. ISM non-manufacturing numbers are also due Tuesday morning (full calendar here). Some notable earnings this week include Micron Technology, WD-40, SUPERVALU, Bed Bath and Beyond, Constellation Brands and Apollo Education. As usual Alcoa kicks off the main reporting season the week after on Jan. 12th, with major financials Goldman Sachs, Bank of America, Citigroup, JP Morgan and Wells Fargo reporting the same week.

That’s it for now- trade well and stay disciplined, and wishing you all a great start to 2015!