Wednesday Wheee! Our Oil Shorts Pay $6,500 Per Contract!

 

Goaaaaaaaaaaalllllllll!

We hit our $98.50 goal line on oil and that’s up $6,500 per contact from $105 at the beginning of the month, where we went heavily short. When oil was at $102.50, on Feb 21st, I said to our Members:

Oil – You can play it either way off the lines.  The reason I play short is because, over the long-term (3 months), I don’t see oil sustaining $100. So, if oil goes to $105 on a violent pop, and I’m down $2,500 per contract, I don’t mind doubling down to raise my net to $103.75 and, if it goes up to $106.25, I don’t mind doubling down again to average a very big position at $105 average and sitting on it for as long as it takes to get real. If I were betting oil up and it dropped $2.50, however, I’d feel like a complete moron and I’d have no desire to DD and then I’d be hopelessly out of position and miserable and if it dropped another $2.50, I’d only feel stupider.  That’s why I prefer to play the side I have conviction on but, believe me, in the course of my own 10,000 hours – I learned that the hard way!  

Realistically, if you think direction doesn’t matter – you probably shouldn’t be playing with Futures – other than very quick nickel and dime trading off support and resistance lines – which is how most people do play them (the beautiful sheeple).   Thank goodness for them, they provide the “liquidity” that goes into our pockets!  

Oil peaked out on March 3rd at $105.22 over the Ukraine issue.  That’s still not resolved but, as we expected in the morning post, it still wasn’t enough to sustain $105 on oil.  In fact, our first trade of the morning in Member Chat was the USO April $38 puts at $1.25 and, already, they closed yesterday at $2.40 – up 92%, but they should look better this morning and we’ll take that 100% gain and run when it comes so quickly.