Two Ways To Play: OPEC On Slippery Slope
Strengthen your portfolio in good times and bad.
The Organization of Petroleum Exporting Countries is ready to make the biggest supply cut in a decade to stop the plunge in crude oil. The cartel, which accounts for over 40% of the world's oil production, will meet tomorrow in Algeria and is expected to cut output targets by at least 2 million barrels a day, according to Bloomberg.
The plunge in crude prices is creating budget shortfalls globally. Last week, OPEC member Ecuador said it will default on foreign debt. Researchers at Citigroup say the U.A.E., Kuwait, and Qatar need crude prices above $55 to balance their current accounts and fiscal spending. This morning crude was up nearly 6% to $49 a barrel in electronic trading on the New York Mercantile Exchange.
From the Bull Pen: Consider the oil ETF (USO). Sell stops can be set in the $36-37 range. Or even oil service stocks like TransOcean (RIG); sell stops can be set below Friday's low near $53.
From the Bear Cave: Bears can still play the dollar which may continue its downtrend for the short term. Consider the dollar bearish fund (UDN) with a sell stop near $25.
For more on OPEC, see Hoofy and Boo's always astute report:
Quick Check Around the World
Asian trading closed with the Hang Seng 1.96%, Nikkei 5.21%, Sensex 1.47%, Taiwan 2.96% and Shanghai 0.52%.
Glancing towards Europe, we see the CAC 0.15%, DAX 1.17%, FTSE 0.22%
As of 8:15 a.m. EST, S&P futures are trading -3 to 882, and Nasdaq futures are +3 to 1218.
A Look At Commodities
Crude oil is trading +2.07 to 48.33. Gold is +6.60 to 825.50. Silver is +0.151 to 10.350, and copper is +2.650 to 143.25.
The dollar index is -0.652 to 82.983.
On the Radar
08:30 Empire Manufacturing
09:00 Net Long-Term TIC flows
09:00 Total Net TIC flows
09:15 Industrial Production
09:15 Capacity Utilization
Click here for the full trading radar.
Happy Monday! Good luck!
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