USO and UCR

The market is currently up ahead of the Fed decision and in light of recent market activity it is all but certain the Fed will lower the interest rates once again a .25 point. Last night I wrote on the blog talking about two Gold ETF's that can stand to profit and this morning I am writing about two Oil ETF's that can stand to profit. In the past two trading sessions oil has retraced a bit due to the surgence of the U.S. dollar. This trend may reverse to day if the FED does what just about everyone on Wall Street has priced in a 25 bps cut. I am using a limit order at 36.00 on UCR to buy on the dip from yesterday awaiting the FEDs decision.

Monday Play Book

The weekend is usually a time I catch up on my research and try to get a feel on how the U.S. markets will open Monday morning 9:30 est to start the week off( although a debatable issue it can be argued that Monday sets the tone for the rest of the week on how the market will perform). If you've been reading my last few posts you would know on how important this week will be with the Fed's FOMC meetings and other important economic news coming out. I have been analyzing different ways to play the market this week around these events. Two things I have my eyes on are energy and gold. For energy I am looking at USO, DUG(contrarian energy plays to one another), DZZ, DGP( contrarian gold plays). Both of these plays will be effected by the monetary policy decisions that will come out this week. According to CBOT, traders are expecting a 75% chance of a 25 basis point cut by the Fed to 2.00 Fed fund rate. However, there is a possiblity some economist say that the Fed will do nothing. I happen to be one of those economist. A newswire from Bloomberg published today 04/28/2008 commenting on the rise of financials about the believe the worst of the U.S. financials credit problems are over. If this belief is confirmed in market data our central bank analyzes, there may very well be a pause in interest cuts to see how the market reacts and a refocus on inflationary concerns which can bring the rise in oil prices and gold to a halt and possibly some retracement. I will be keeping in eye on CBOT reporting up to the minute to better gauge the possiblity of either event occuring but altogether what ever happens its going to effect the markets until the Feds next FOMC meeting later on this Summer.

The most efficient way to play the Oil Futures game

One of the most efficient ways I like to play the Oil futures game, has nothing to do with future contracts at all. It is with Oil focused ETF's like USO. ETF's in my opinion our greatest financial product to be engineered and the past quarter century. They have proliferated as of late and the market is growing an ever increasing appetite for these products. Well, now that I got all that of the way. Tell me what you think of this chart and the oscillation on USO. It doesn't seem to be able to rally above its 10 week high and sustain. This may mean trouble in the week to come or maybe not. What do you think?