Despite Oil's Slippery Slope, Consider USO

| About: The United (USO)

Oil is now at $38 a barrel. It has been trading the $38-$42 range for the last month or so. One can complain about the Dow falling 50% over 12 months, but how about Oil falling 75% in 6 months? It fooled a good many who were betting it would keep going up and maybe rising to $200. It certainly fooled T. Boone Pickens, who many consider to be the best oil trader around. He had predicted oil would end the year at $150.

Now, 6 months after an all time high, oil sits at under $40 despite the recent events in the Middle-East. Gas prices at the pump hit a low not seen in over 8 years last month. At some point though, the markets will get sane again, and the smoke will clear. At that point, I expect oil to move up to a more normal $60-70 range. Things have already started to even out with prices at the pump now moving higher from their December lows. So with the understanding that there may be some more short-term downside to oil prices, I recommend the start of a (NYSEARCA:USO) long position at current levels.