Remain the Same

First, I have to give my congratulations to the Harper Government and their much-deserved majority. Moving on….

I write this tonight on the edge of what has the potential to be my best, or worst trade ever. I’ve already come to terms with my potential downside following the turn of the market and the subsequent 20%+ sell off of $WNR since before Easter. That’s okay though, I still think there is potential to laugh in the face of shorts, bears, and genuine market manipulators. $WNR has set itself up with an oversold RSI, a series of down days, and selling pressure escalated by fellow refining company $VLO’s horrendous management hedging its production and giving terrible guidance. However those long $WNR are equally as optimistic heading into tomorrows earnings for not only the WTI discount $WNR produces from to the Brent, but added on near record Crack (cocaine) spreads priced by the 3-2-1 Nymex. Barring management pulling a “$VLO” this trade still has plenty of potential. Furthermore, $TSO reported after hours today and crushed earnings. $WNR has more potential and with crack spreads still moving parabolic, should guide well.

Moving on to some other setups that I personally think are attractive over the next few days. First is a Canadian small cap company $ADV.to, Alderon Resource Group. This company holds extremely strong Iron ore resources to the tune of 28% grade in some areas based out of Newfoundland. They’ve tested the 200ma today, and although there has been soft selling you can see the RSI has also been at 0 for a number of days here. I’m a buyer on strength with a target above $3.

Next, a company I have traded multiple times that I am in love with is Suncor $SU. They had phenomenal earnings (what oil company didn’t), but lowered guidance for the next quarter. There is also speculation about risk to their assets in both Libya and Syria, but I’m a buyer on strength and I think the recent oil sell is over done. I love this company at $40 (CND ticker) and everyone knows the low risk Canadian oil sands plays are in relation to Middle East production.

Finally I will address Precious Metals. There is no question Silver is oversold at this point having given up a lot since Monday of this week. However, I have no confidence in the thing, I’ve been a closet bear the entire parabolic move to $50. TJWP believes we see $100 Silver in 2012, personally I think we’ll see $17 Silver. I’m not convinced, never was convinced, but was happy to ride the trend. Plus, this thing has manipulation written all over it. So if you’re inclined to play make sure you leave yourself PLENTY of room to average in incase the inverse of your expectations happens. Gold however I like on strength. Gold is far more resilient than Silver, and if I can even say less manipulated. One stud that I’ve traded a few times has been beat down and is still an attractive company: $ABX. Barrick opened its treasure chest to expand its Copper exposure and the market did not like them spending that money – some argue even over paying for the assets. At this point Barrick is oversold, but it just blew through its 200ma and we could see a bounce or further weakness. Either way long term it is a phenomenal company and I would keep it on your watch list.

We should see market strength here after our overbought run on the S&P, but who knows. Resistance will hopefully supported by the bulls at the 1340 level. There has been a lot of fuckery this week combined with speculation about QEx. The USD is also showing signs of serious weakness that is quite destructive for American industry – when they struggle to be able to afford input commodities for their manufacturing yet good for exports.

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One Response to Remain the Same

  1. Ed says:

    $17 silver, eh? sadly, a possibility (disclosure: long silver)…but i think we see $50 before $17.

    those margin requirements are getting a little ridiculous, don’t you think?

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