If we’re going to go down, I want to go DOWN.
UCO is cracking again; oh how sweet it would be if that short went below $30 once more. I don’t know if oil is properly priced here or not, but I’m deep enough in profits on my short that I can afford to sit on my ass and play spectator during the rebounds.
UCO isn’t recovering any time soon; that’s the beauty of derivatives. Once they expire worthless, there is no quick redemption for them. The balance you read about (1X, 2X, 3X, etc.) only works for a short price action distance going up.
But directly behind those contracts is something of a cliff.
Even decent downward price action can cripple the products. Should oil recover to $110, don’t expect UCO will follow along too far. And the longer before oil recovers, the worse off it will be as the more contracts will expire.
Of course, my longs are getting crushed right now. I will undoubtedly end down for the day, if we don’t recover. But I’m committed to my longs.
This is a buying opportunity, which I will take cautiously in a logarithmic approach; 10% levels at a time.
I never took the time to sell positions and lock in gains on this rebound. But if you look at CLP, AEC, AWK, or even CCJ, you’ll understand why I’m not too worried.
CLP and AEC recovered fully to their longer term trends. I’m not one to get emotional about technical issues, but this reinforces to me that they are in high demand. Their sell off was from indiscriminate liquidations and once those needs were met by the perpetrators the shares were gobbled back up with insatiable demand.
AWK also exhibited an exceptionally strong rebound and I am witnessing the epiphany hit the masses first hand that utilities make great replacements for bonds. I’ve seen several articles on the issue come out lately and have reason to suspect that (particularly if the funding crisis of countries, states, and municipalities continues) utilities like AWK will witness support as safe havens.
Remember back when I first joined the iBankCoin community and said utilities should be purchased because they were underpriced based on their stability and steadier, profitable operations?
Now ladies and gentlemen; my dearest guests; let’s keep our heads and make a fortune together.
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Just wondering, why are you not worried about ccj? I can’t really see what you’re getting at but it would help if you explained a bit from their chart that motivates your thinking. Thanks.
This selloff has put CCJ right around where they were after the Japanese crisis. I take that to suggest that the stock was already pretty accurately reflecting calamity before this selloff. It also suggests that I was right about my convictions to purchase CCJ when I did; nuclear energy was not going anywhere. If it were, then further economic calamity would have sent CCJ to new, more significant lows.
This too will blow over. CCJ is being underscored here but the long term issues with the uranium market are negligible and CCJ is a definite buy.
This was kind of why I didn’t understand your comment. The Japan earthquake knocked ccj down from about 38 to 28. Then it downtrended for several months reaching a low of about 23.10 before rallying nicely. This rally was torpedoed by the recent market collapse. CCJ now stands at just under 21, which is definitely a new low not seen in the post-japan aftermath. Did you misread the chart, or maybe I’m not fully understanding you?
Just for a disclaimer, I am long ccj (and suffering).
Thanks.
Not really, I don’t take much score in the $2 difference. It sounds impressive until you compare it to where the stock was trading before Japan. Next to that, the variance is insignificant.
Hang in there, the money will find CCJ before long.