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Two Ways: Buy the Rumor, Sell the Crude


Strengthen your portfolio in good times and bad.


Where's Crude Headed?

Crude has been rising for the past 3 weeks, which is leading many to believe the commodity has finally found a floor. Oil has dropped over $100 from last summer's all-time high of $147. But according to the New York Times, a number of market participants are questioning whether crude oil has really reached a bottom, with some believing it could fall to $20 a barrel - and stay there for years as the global economy worsens.

It should be noted this view isn't widely held, and oil bulls are quick to point out the that Organization of the Petroleum Exporting Countries (OPEC) continues to prop up prices with production cuts. Analysts are expecting more cuts -- from 500,000 to 1,000,000 barrels a day -- when the cartel meets in Vienna on March 15.

From the Bull Pen: If you're bullish oil, the best exposure could likely be Suncor Energy (SU). In the near term, one can set a sell stop below $22.50.

From the Bear Cave
: Oil bears can play the downside in the ETF (USO); a buy stop can be set above $30. More aggressive traders can use the Ultrashort Oil & Gas (DUG). But remember, it's for very short term positions only.

Quick Check Around the World

Asian trading closed with the Hang Seng 3.08%, Nikkei -0.44%, Taiwan 0.92% and Shanghai 1.88%.

Glancing towards Europe, we see the CAC 1.21%, DAX 1.78%, FTSE 1.12%

As of 8:00 AM EST, S&P Futures are trading +13 to 689, and Nasdaq futures are +10 to 1063.

A Look At Commodities

Crude oil is trading +0.29 to 47.36. Gold is -2.70 to 916.30. Silver is -0.11 to 12.830, and copper +2.05 to 166.00.

The dollar index is -0.4750to 88.5250.

On the Radar


10:00 Wholesale Inventories -1.00%
10:00 IBD/TIPP Economic Optimism

Click here for the full trading radar.

Be careful, Minyans. Turnaround Tuesday is no guarantee. Good luck!

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No positions in stocks mentioned.

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