Trade Alert – (USO) April 20, 2020 – BUY

When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.

Trade Alert – (USO) – BUY

BUY the United States Oil Fund (USO) $3.75 or best

Opening Trade

4-20-2020

Portfolio weighting: 5%

Number of Shares = 1,333

Crude oil hit the unbelievable negative prices below $0 and you would think that is cheap, but then Canadian oil is trading at negative -$5.00. You literally can’t give oil away right now.

All transportation use of oil has virtually ceased. Most airlines are grounded and nobody is driving anymore.

All this is related to the options expiration on Tuesday where no one can take delivery because all available storage worldwide is committed.

Throwing gasoline on the fire are 16 supertankers which sailed from Saudi Arabia but for which there are no buyers.

This panic is happening in the face of Cushing, Oklahoma’s storage capacity which is now at 61 million barrels and could be at its limit of 78 million barrels in a couple of weeks. Then where does the Texas tea go?

Since June futures are still trading at $20, I believe this carnage is due to the option expiration and should pass in a few days.

I know this sounds insane, but if you buy the (US) here and it returns to the $5.00 where it was trading last Thursday, and oil was trading at $25, you should be able to make a quick 25% on your money in a few days.

Of course, you are also betting that US prices don’t go to negative -$5.00 also. That’s why I’m only going with a 5% position instead of the usual 10%.

Here is the specific trade you need to execute this position:

Buy 1,333 X (USO) at……………….………$3.75

Total cost: 1,333 shares X $3.75 = $4,998.75

Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.

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