The ACD Method

[Quon]

For us slow pokes, how do people feel about the USO as a proxy for CL?

Don't trade futures... yet... and I'm looking for a "pure" play on CL. OXY has been working nicely, but with the chop in the ES it's faltered as of late. USO kept rocking despite the past two days.

Many thanks all in advance!

 

[Maverick74]

Quote from Quon:

For us slow pokes, how do people feel about the USO as a proxy for CL?

Don't trade futures... yet... and I'm looking for a "pure" play on CL. OXY has been working nicely, but with the chop in the ES it's faltered as of late. USO kept rocking despite the past two days.

Many thanks all in advance!

USO is fine for daytrading. You need to be careful when oil goes into contango because you pay the roll yield if you are going to just hold it. When oil goes into backwardation then you earn the roll yield. The curve is currently pretty flat now so you can hold USO but you need to always check on that. There is also OIL ETF, but there is less volume then USO.

 

[drm7]

Quote from Maverick74:

Here is a chart of long oil and short copper. Very smooth regardless of direction of risk assets. This is how you find alpha.

Bone would be so proud of you...

 

[Quon]

Quote from Maverick74:

USO is fine for daytrading. You need to be careful when oil goes into contango because you pay the roll yield if you are going to just hold it. When oil goes into backwardation then you earn the roll yield. The curve is currently pretty flat now so you can hold USO but you need to always check on that. There is also OIL ETF, but there is less volume then USO.

Thanks Mav,

Yeah, I worry about the spreads in the OIL ETF versus the USO, but I didn't know about the contango roll yield effect. Thanks for the heads up.

 

[baggerlord]

http://org.elon.edu/ipe/Dimitrova final.pdf

The Relationship between Exchange Rates and Stock Prices: Studied in a Multivariate Model
Desislava Dimitrova, The College of Wooster

 

[Maverick74]

Another bear roast today.

 

[Samsara]

Quote from Maverick74:

Another bear roast today.

Yes indeed. Was long AUD/USD futures yesterday, now at intraday A up, crossing weekly A down (less relevant on a Friday).

Not easy to add 25% of position, particularly on a Friday. May hold off on that.

 

[Maverick74]

Looking more and more likely we end the year north of 1300 on the S&P and north of $100 on Crude Oil.

 

[Maverick74]

Quote from Samsara:

Yes indeed. Was long AUD/USD futures yesterday, now at intraday A up, crossing weekly A down (less relevant on a Friday).

Not easy to add 25% of position, particularly on a Friday. May hold off on that.

Here is my London AUD/USD chart. Solid confirmed A up today and solid bounce off the monthly A down now.

 

[Shanb]

ya know what they say...don't sell a sleeping market!