Energy Trade Looking Good With Oil up Again
Source: Michael Ballanger 10/02/2024
Michael Ballanger of GGM Advisory Inc. takes a look at the energy market and shares some stocks in his portfolio.
USD index futures are up 0.24% this morning, with the 10-yr. And 30-yr. yields also up 1.34% and 1.40% respectively.
Gold is down 0.65% ($17.40), while silver (+0.66%), copper (+0.70%) and oil (+2.69%) are rising.
Equity futures are off modestly (-0.09% to – 0.21%), and risk barometer Bitcoin is down 3.94% to $61,262.
The energy trade that was executed yesterday morning was proof positive that “it’s better to be lucky than to be good” as my Energy Select Sector SPDR Fund (XLE:NYSEARC) $87.00 “Buy” limit was hit shortly after the opening bell and literally just before oil prices engineered a massive reversal to the upside.
I also had a Buy rating on Hemisphere Energy Corp. (HME:TSX.V) at CA$1.90, which was also triggered before running to a 52-week high at CA$1.97.
Oil is up sharply again this morning, which should bring about massive short-covering in both the oil futures and the energy stocks, so keep a close eye on the RSI for both crude and the XLE to avoid getting mesmerized by an overbought market. This trade is a date, not a marriage.
With my trading account cash down to 23.67%, I still have lots of room to add to positions into an October swoon in these markets, and I can assure you that I will be adding to the energy trade if it backs off. The copper-gold duo remains my top sector holding going into year-end, and I hopeful that Freeport-McMoRan Inc. (FCX:NYSE) can pull back into the mid-$40′s so I can replace the call positions and the 50% of the stock position that I sold at $51.50 (the top) a few days ago.
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This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.
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