Thursday Thrust - Rent-A-Rebel Pops Oil Over $106 Just in Time for the Holidays

The boyz are back in town!

By boyz, I mean al-Qeada and by town, I mean Tikrit, which is about 40 miles from Baghdad which has "dad" in it and Father's day is Sunday so now you are all caught up on the Middle East.

Oh, and that's not picture of the rebel attackers – that's a picture of the Iraqi "army" mounting a response to "dozens" of rebels who came into town "a hootin' and a hollerin'" and shooting up the place. As I pointed out to our Members, with 200,000,000 fake orders for July oil deliveries that have to be canceled by next Friday – all it costs is $10M to pay al-Qeada to cause a ruckus and oil pops $2 overnight and the contract holders make an extra $400,000,000 – a very nice return on their investment. CNN had footage of the attack:

As you can see, the situation is dire – until they get a new sheriff. Meanwhile, oil is over $106 (7:45) and it was over $106 earlier and we shorted the cross below the line in our Live Member Chat room at 6:37 and picked up a quick $250 per contract at $105.75 and we'll short any cross below any .50 line with tight stops above on the way down – as, eventually, there will be a new sheriff – or at least a shareef…

At the moment, oil is back over $106 and we're ready to re-load (at $106.50 with very tight stops). As we did yesterday, we're happy to make $250-$500 per move as it wriggles around in the channel. You can't beat these guys – may as well join them!

We'll likely add USO puts or SCO (ultra-short oil) longs to our Short-Term Portfolio with an eye towards oil going no higher than $110 into the July 4th weekend (as we discussed in Tuesday's Webinar) but failing to hold that, or even $105, for an extended period. Meanwhile, we'll keep an eye on the advancing al-Qeada forces as our Corporate Media makes the biggest possible mountain out of this mole-hill to justify their sponsors jacking up the price of oil – AS USUAL – into the biggest driving weekend of the year.

Last June, oil was between $91 and $95 all the way until the last week of June but then, magically, it shot up over $105 just in time to screw Americans over at the pump and was held up around $110 into Labor Day, topping out at $112 before plunging back below $100 in September and all the way back to $92.50 in October. That's why we'll be playing October shorts on oil – just like we did last year, when I said on August 28th (with oil at $110 and climbing, that time using Syria as an excuse):

SocGen calls for oil to go to $150?!? That's a lot of money for oil. That would put gasoline up around $5 per gallon so the easy trade here is to grab some /RB Futures contracts ($3.07) and, at $420 per penny, per contract, a single contract would pay us $81,060 if gasoline hits $5 – that's enough money to buy a Tesla, and then we never have to buy gas again!

For anyone who believes the idiocy being spun by Societe Generale or their other Bankster buddies as they bang the fear drum, accompanied by their MSM puppets – just buy a single, long gasoline Futures contract and you'll find yourself rooting for death and destruction in the middle east.

As you can see from the chart of oil Futures above – there's still plenty of money to be made on the short side as we only play the crosses BELOW the .50 lines and, even though oil went over $110 and fooled us once for a quick stop – it went all the way up to $112 without a retrace, then fell all the way to $111 for a $1,000 per contract gain and then fell through $111 to $110 for another $1,000 gain and then through $110 to $109.50, for another $500 gain. Our job is just to stay in position, ahead of "The Big One" – like we had in the Summer of 1987:

I know most analysts like to pretend they have original ideas for you but I'm happy to tell you that, last year, I thought we should do the same thing that worked in 1987 and this year I'm telling you we can do the same thing that worked in 2013 and ultimately paid us over $10,000 per contract. In fact, I called on the President to give me the keys to the SPR so I could use it to short ALL of the NYMEX oil contracts (360M barrels worth at the time). By October 22nd, that trade idea would have paid back $3.9 BILLION!

As I said at the time:

Even if you didn't have $1.6Bn laying around, shorting a NYMEX Futures contract uses just $4,500 in margin (and don't miss our Options and Futures Trading Seminar in Las Vegas, Nov 10th and 11th) the LOX3 November $110 Futures option I suggested as an alternative on 8/28 cost just $450 per contract and paid off $1,000 when it expired last week (options expire earlier than the Futures, which expire today) a quick gain of 122% on whatever cash (no margin required) you may have had laying around to make a play.

You can read those two posts to get an idea of all the different ways we were able to make money shorting oil last year and here we are again, coming into "Summer Driving Season" and again we will have an opportunity to make a ton of money on the back end – but it's a slow process and you have to be PATIENT and manage your position sizes to allow for the fact that oil can pop up another $10 and it could last a few month. That's why we went over the scaling in and out strategies in Tuesday's Futures Trading Webinar.

USO WEEKLY The same(ish) strategies apply to options we will take on USO and SCO and yes, we'll look at the Futures Options on oil as well in our Live Member Chat room (which you can subscribe to HERE).

It's not all oil trading, of course – just this morning we sent out an Alert to our Members adding two stocks to our Long-Term Portfolio. But, for the moment, oil is going to be exciting, so we'll play it.

In fact, while I was writing this (now 8:42), we caught the move back to $106.50 and then got another $250 per contract drop back to $106.25 and now we can afford a REALLY good breakfast with our two morning wins and we'll see if 3rd time's a charm as we prepare to reload.

This is very exciting stuff – time for me to head off to the Live Chat Room!

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Phil

Author

June 13, 2014 6:13 am

Haven't I been saying this for years?

Check out this show:

Wow, I never heard of it. Too bad it was on the History Channel – more people need to know about this stuff.

June 13, 2014 6:57 am

Here's a guy telling us the difference between good and bad discrimination:

News:

June 13, 2014 7:04 am

From Bloomberg, Jun 13, 2014, 5:49:45 AM

June 13 (Bloomberg) — Gareth Lewis-Davies, energy strategist at BNP Paribas, examines the threat to oil production in Iraq from insurgent violence as the unrest drives global oil prices higher and looks at how it may impact production decisions by OPEC. He speaks with Olivia Sterns on Bloomberg Television’s “The Pulse.”

Oil led commodities to a nine-month
high on concern that turmoil in Iraq will disrupt supplies.
European stocks fell, while the pound strengthened as Bank of
England Governor Mark Carney signaled interest rates may rise
sooner than investors expected.

To read the entire article, go to http://bloom.bg/1l6pfNQ

Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8

June 13, 2014 7:06 am

From Bloomberg, Jun 13, 2014, 6:06:57 AM

June 6 (Bloomberg) — European Central Bank President Mario Draghi speaks about the unveiling of an unprecedented round of measures to help the euro-area’s record-low interest rates feed through to an economy threatened by deflation.
He spoke yesterday in Frankfurt at the ECB’s monthly news conference. (Excerpts. Source: Bloomberg/European Central Bank)

For investors in the euro area’s $1
trillion government bond market, the takeaway from Mario Draghi’s extraordinary stimulus plan is that interest rates are
going to stay lower for much longer.

To read the entire article, go to http://bloom.bg/1saUM4U

From Bloomberg, Jun 13, 2014, 4:53:03 AM

June 10 (Bloomberg) — European Central Bank Executive Board member Yves Mersch speaks during a panel session about the euro-area economy and banking system.
He speaks at the Brussels Economic Forum. (Excerpt. Source: Europe by Satellite)

The European Union has served notice
that senior bondholders will be in the firing line for losses
when banks go bust, yet the law’s fine print leaves room for
confusion.

To read the entire article, go to http://bloom.bg/1kR3G2M

From Bloomberg, Jun 13, 2014, 2:45:29 AM

Victor Ponta, Romania’s prime minister, speaks during an interview at the Victoria Palace in Bucharest on June 12, 2014. Photographer: Akos Stiller/Bloomberg

The leaders of Romania and Slovakia,
two former communist NATO members that border Ukraine, called
for the European Union to unite in the face of resurgent Russian
expansionism.

To read the entire article, go to http://bloom.bg/1ojOSwV

From Bloomberg, Jun 13, 2014, 6:10:47 AM

Gold was little changed near a two-week high, set for the first back-to-back weekly advance since
April, as investors weighed whether escalating violence in Iraq
will increase demand for the precious metal as a haven.

To read the entire article, go to http://bloom.bg/1ojyqN9

From Bloomberg, Jun 13, 2014, 6:50:46 AM

June 13 (Bloomberg) — Amrita Sen, chief oil market analyst at Energy Aspects Ltd., talks about the impact of fighting in Iraq on crude oil production and prices.
She talks with Mark Barton on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

West Texas Intermediate crude headed
for the biggest weekly advance since December and Brent gained
as escalating violence in Iraq threatened supplies from OPEC’s
second-largest oil producer.

To read the entire article, go to http://bloom.bg/1l6p0SO

June 13, 2014 7:08 am

From Bloomberg, Jun 13, 2014, 6:10:29 AM

Since Ukraine’s territorial
integrity started crumbling in March, the nation’s bonds have
outperformed regional peers. For Landesbank Berlin Investment
GmbH, that’s unsustainable.

To read the entire article, go to http://bloom.bg/Uywrrg

From Bloomberg, Jun 13, 2014, 5:01:54 AM

Motorists drive past Royal Thai Army soldiers stationed near luxury hotels on Ratchadamri Road in central Bangkok, Thailand, on Tuesday, May 20, 2014. Photographer: Dario Pignatelli/Bloomberg

Thailand’s baht rose, erasing its
losses since a May 22 coup, as an end to seven months of street
protests and a planned pickup in government spending help
attract overseas funds to the nation’s assets.

To read the entire article, go to http://bloom.bg/1qa4Md1

June 13, 2014 7:10 am

From Bloomberg, Jun 13, 2014, 4:24:26 AM

China’s one-year interest-rate swaps
completed their first weekly gain in four on speculation signs
of an improving economy will delay any monetary easing.

To read the entire article, go to http://bloom.bg/1l6QEz3

From Bloomberg, Jun 13, 2014, 12:23:32 AM

Chris Christie, making his first
appearance on late-night television since a traffic-jam scandal
erupted this year, joked that he “hypothetically” could defeat
Hillary Clinton, at least on the dance floor.

To read the entire article, go to http://bloom.bg/1ojSCOW

June 13, 2014 7:12 am

From Bloomberg, Jun 12, 2014, 8:50:00 PM

As New Jersey faces a budget crisis,
among the biggest challenges are shortfalls created because
chief economist Charles Steindel’s revenue projections have been
short four of the past five years.

To read the entire article, go to http://bloom.bg/1ojiRF5

From Bloomberg, Jun 13, 2014, 4:30:40 AM

June 12 (Bloomberg) — Bank of England Governor Mark Carney speaks about the U.K. economy, central bank policy and regulation of financial markets.
Carney, speaking at the Mansion House in London, said the BOE could raise interest rates from a record low earlier than investors expect as he expressed concern that mounting debt related to the housing market could undermine stability. (Source: Bloomberg)

The pound reached the strongest
level in 19 months against the euro after Bank of England
Governor Mark Carney said the institution may raise interest
rates from a record low earlier than investors expected.

To read the entire article, go to http://bloom.bg/UypypV

June 13, 2014 7:14 am

From Bloomberg, Jun 13, 2014, 4:30:14 AM

June 13 (Bloomberg) — Jesper Koll, head of Japan strategy at JPMorgan Chase & Co. in Tokyo, talks about the nation’s economy, corporate spending, government and central bank policies.
He speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

Japan’s Prime Minister Shinzo Abe
said he aims to start cutting corporate taxes in 2015, reaching
agreement with senior lawmakers on a core part of his agenda as
the central bank kept up pressure for sustainable finances.

To read the entire article, go to http://bloom.bg/1qafEYb

June 13, 2014 7:16 am

From Bloomberg, Jun 13, 2014, 12:01:00 AM

May 27 (Bloomberg) — The Chinese government is pushing domestic banks to remove high-end servers made by IBM and replace them with a local brand, according to people familiar with the matter, in an escalation of the dispute with the U.S. over spying claims. Hans Nichols has more on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

Somewhere in China, a man typed his user name, “ghost,” and password, “hijack,” and proceeded to rifle the computers of a utility in the Northeastern U.S.

To read the entire article, go to http://bloom.bg/1q9VBsQ

From Bloomberg, Jun 13, 2014, 1:57:36 AM

Japan will introduce legislation
this year to ratify a controversial treaty backed by General
Electric Co. and other atomic-plant manufacturers seeking
protection from damage claims caused by nuclear accidents.

To read the entire article, go to http://bloom.bg/1hNNfom

options_alpha

Member

Phil, Thoughts on /NG prices.

June 13, 2014 7:18 am

From Bloomberg, Jun 13, 2014, 4:54:10 AM

June 10 (Bloomberg) — Lu Ting, head of Greater China economics at Bank of America Corp. in Hong Kong, talks about the world’s second-largest economy, and its government and central bank policies.
He speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

China’s industrial output and retail sales increased at a faster pace in May, adding to evidence that Premier Li Keqiang’s support measures are stabilizing the world’s second-biggest economy.

To read the entire article, go to http://bloom.bg/1v87krR

From Bloomberg, Jun 13, 2014, 12:16:22 AM

June 13 (Bloomberg) –- Bloomberg’s David Ingles reports on the Bank of Japan’s monetary policy announcement, leaving its bond-buying program relatively unchanged. He speaks to Rishaad Salamat on Bloomberg Television’s “Asia Edge.” (Source: Bloomberg)

The Bank of Japan raised its view of
overseas economies while maintaining unprecedented stimulus as
Governor Haruhiko Kuroda strives to boost inflation that remains
short of a 2 percent target.

To read the entire article, go to http://bloom.bg/1l6R0WC

From Bloomberg, Jun 13, 2014, 5:38:25 AM

Residents walk past razor wire on the perimeter of the Wonderkop platinum processing plant, operated by Lonmin Plc, in Marikana. South Africa’s economy, the second-largest on the continent after Nigeria, is threatened with recession as a 20-week strike over pay shut the world’s biggest platinum mines. Photographer: Dean Hutton/Bloomberg

South Africa’s credit-rating outlook
was cut to negative from stable by Fitch Ratings because of a
deterioration in the country’s growth prospects.

To read the entire article, go to http://bloom.bg/TQNJiF

June 13, 2014 7:20 am

From Bloomberg, Jun 13, 2014, 6:34:29 AM

The Bank of England governor is Marching to his own drum.

When Canada’s Mark Carney became governor of the Bank of England last year, Avery Shenfeld, the chief economist of Canadian Imperial Bank of Commerce, described him to me as the Ringo Starr of central banking: “He may not be the best drummer in the world, but he’s joining the best band.”

To read the entire article, go to http://bv.ms/1hT9WI7

June 13, 2014 7:22 am

From Bloomberg, Jun 13, 2014, 6:10:30 AM

Good morning. Here’s my take on some of the stories driving the debate in politics, finance and social issues across Asia today:

To read the entire article, go to http://bv.ms/1hT8fdz

Futures marginally lower; turmoil in Iraq continues

07:01 AM ET · SPY

The story is oil which has risen to a 9-month high behind the escalating violence in Iraq, with Iranian forces joining those from Iraq to combat Sunni militants and the White House considering returning to military action in the country. WTI crude +0.4% to $107 per barrel.
Europe’s Stoxx 50 -0.7%, and Asia was mostly higher overnight.
The 10-year Treasury yield is flat at 2.6% and gold is flat at $1,274 per ounce.
ETFs: SPY, QQQ, SH, DIA, SSO, SDS, PSQ, VOO, IVV, SPXU, UPRO, TQQQ, SPXL, QID, RSP, SQQQ, DOG, QLD, DXD, RWL, EPS, UDOW, SDOW, DDM, BXUB, QQEW, QQQE, SFLA, SPLX, QQXT, BXUC, SPUU

June 13, 2014 7:24 am

On the hour

07:00 AM ET

S&P -0.13%.
10-yr -0.1%.
Euro -0.09% vs. dollar.
Crude +0.51% to $107.08.
Gold -0.02% to $1,273.80.

Overseas

06:00 AM ET

Japan +0.83%.
Hong Kong +0.62%.
China +0.93%.
India -1.45%.
London -0.92%.
Paris -0.64%.
Frankfurt -0.79%.

BMW, Tesla in possible technology partnership

05:30 AM ET · BAMXY

BMW (BAMXY) says it met with U.S.-based electric car maker Tesla (TSLA) this week to discuss a possible joint operation regarding electric vehicle technology.
“Both companies are strongly committed to the success of electro-mobility and discussed how to further strengthen the development of electro-mobility on an international level,” a BMW spokeman announced.

LinkedIn facing privacy rights lawsuit

04:30 AM ET · LNKD

LinkedIn (LNKD) is facing a lawsuit which claims it violated customers’ privacy rights for marketing purposes. The company is accused of accessing users’ external e-mail accounts and downloading contacts’ addresses though the users e-mail address provided when signing up to the site.
LinkedIn customers can now pursue damages for revenue it made from using the e-mail address books.
The lawsuit calls into question how wiretap laws enacted before the Internet apply to data generated when people send e-mails and surf online.

Intel shares soar in AH trading

04:01 AM ET · INTC

After Intel (INTC) raised its second quarter revenue forecast yesterday, shares climbed as high as 6.6% to $29.80 in extended trading.
The second quarter boost came after an increased demand for personal computers, with annual company sales estimated to increase for the first time since 2011.
Sales for this quarter are predicted to be approximately $13.7B, compared to an earlier estimate of $13B.
INTC +5.6% AH

BlackBerry, EnStream reach deal on mobile payment system

03:30 AM ET · BBRY

BlackBerry (BBRY) has reached an agreement with EnStream, a joint venture between Canada’s three biggest telecom companies — Bell (BCE), Rogers (RCI) and Telus (TU), to provide the infrastructure for a new mobile payment platform.
Under the three-year deal, EnStream will use BlackBerry infrastructure so banks and mobile operators can securely keep sensitive payment information on any smartphone able to use near field communication (NFC) tags.
NFC tags permit smartphones to communicate with other mobile devices or credit payment systems by tapping the two together.

June 13, 2014 7:26 am

Report: Google in talks with Virgin Galactic

02:47 AM ET · GOOG

Google (GOOG, GOOGL) is said to be in talks with Virgin Galactic regarding a joint venture that would mutually benefit both companies, Sky News reports.
After it set out on its goal to get internet access to billions of people, Google is seeking to put hundreds of satellites into low-Earth orbit. Google sees the opportunity with Virgin Galactic as a means to obtain its vision.
In turn, the deal would consist of Google investing hundreds of millions of dollars into Virgin Galactic to develop its space tourism business. Google is also reported to want a small stake in the Virgin Galactic holding company.

Caterpillar under fire with engine lawsuits

01:59 AM ET · CAT

Caterpillar (CAT) is facing at least 15 lawsuits relating to truck and bus engines it sold between 2006 and 2010. The plaintiffs are claiming the engines broke down often, and even in some cases caught fire, although no deaths or injuries have been filed.
The company closed its truck and bus engine business for the U.S. market after 2010 due to high costs and small market share.
Last year, Caterpillar’s engine business accounted for 60% of its $5.63B operating profit.
The news comes after Caterpillar’s settlement this past Wednesday, when the company payed $46M to settle a lawsuit involving a marine engine that caught on fire in 2009.