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Paul Mosgovoy
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Truth is timeless: “Markets never change” – Jesse Livermore, 1923 The early masters, Livermore, Wyckoff and Loeb isolated themselves from the crowd and crowd thinking. None of them ever graduated high-school and yet they each became legends in the market. Their techniques have been time-tested.... More
  • USO: Et Tu Brute? 7 comments
    Jul 9, 2014 10:11 AM | about stocks: USO

    If we are to have runaway inflation, would not oil be consolidating for a sustained push higher?

    Looking at the chart of the oil market proxy, The United States Oil Fund LP ETF (NYSEARCA:USO), we see that inflation is nowhere to be found.

    (click to enlarge)USO Weekly Chart

    Chart by StockCharts

    In fact, just like the iShares Russell 2000 ETF (NYSEARCA:IWM), the USO is showing a rising wedge termination that is now proceeding lower.

    Our premise is and remains that we are experiencing a significant across-the-board trend change.

    As stated in the previous post on the IWM, be on guard for the "it's a buying opportunity" crowd. Here they are........

    The position that has been established in the Direxion Russell 2000 Bear 3X ETF (NYSEARCA:TZA) is action taken in response to the analysis that the next sustained major move is lower.

    Even so, anything can happen in the market. A good stop location for the position in TZA, would be in the 13.56 area (this week's low).

    Disclosure: The author is long TZA.

    Stocks: USO
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Comments (7)
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  • zaw77
    , contributor
    Comments (54) | Send Message
     
    Hi Paul, I sold 1/2 of TZA at 14.65 today and I would like to add on weakness to avg. down. Regards, Krzysztof
    9 Jul 2014, 02:55 PM Reply Like
  • Paul Mosgovoy
    , contributor
    Comments (119) | Send Message
     
    Author’s reply » Good morning Krzysztof,

     

    You made a nice profit. It is good that you have 1/2 left.

     

    Today looks like a huge gap-higher open for TZA. My research says that this move might go for a long time (3 - 6 months), so I want to make sure I use the opportunity.

     

    I have my full position and will be looking to take more opportunities as they come.

     

    TZA may go as high as 16 before it retraces. Or, it may just keep going with no pull-back at all. That is the problem with big moves...........sometimes they just keep going and do not let anyone get in.

     

    Nice to hear from you. I hope that these updates are helping.

     

    Paul
    10 Jul 2014, 08:39 AM Reply Like
  • bobzic
    , contributor
    Comments (147) | Send Message
     
    In french, it is "es tu brute?
    15 Jul 2014, 07:44 AM Reply Like
  • Paul Mosgovoy
    , contributor
    Comments (119) | Send Message
     
    Author’s reply » "Tu" being the familiar address in french. Otherwise it would be "vous" Am I right?

     

    The Latin used Tu..... or at least that what Shakespeare wrote. :-)

     

    Glad you liked the reference.

     

    USO is continuing on lower.

     

    Paul
    15 Jul 2014, 08:08 AM Reply Like
  • bobzic
    , contributor
    Comments (147) | Send Message
     
    Sorry Paul, I am french and i dont understand what you mean by "Et tu brute?". Interesting article.
    15 Jul 2014, 10:09 AM Reply Like
  • Paul Mosgovoy
    , contributor
    Comments (119) | Send Message
     
    Author’s reply » It is Latin.......... and is translated "And you also Brutus?"

     

    In the Shakespeare play Brutus was a close friend of Caesar.

     

    The article means that the oil sector is also turning lower and signalling that we may be in for deflation instead of inflation.

     

    Hope this helps.

     

    Paul
    15 Jul 2014, 10:15 AM Reply Like
  • bobzic
    , contributor
    Comments (147) | Send Message
     
    Thank you Paul
    15 Jul 2014, 10:43 AM Reply Like
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