Pity the Fool 8/27/10

It’s tough taking investment advice from a man who dons overalls, sports a mohawk and wears gold chains so maybe you should listen to MB Wealth. Oil has rallied 6.5% in the last three days and the interim bottom we alluded to appears to be in. From here as we’ve posted in recent blogs a move back near $80 should play out in the coming weeks. Those calling for $60 should be cutting their losses about now. Heating oil should find its way to $2.20 and RBOB to $2.05. Natural gas remains the laggard in the sector but clients still hold November call options. We would not advise futures as who knows where the bottom is. For those that have been long for several weeks we’ve started to advise buying back their upper legs on call spreads. Could MB Wealth be correct again? A lower Q2 GDP was ignored as stocks close near their highs on the day. Those who follow us should see we advised exiting short indices this week and to get short the Treasury complex; short 10-year notes. Silver was higher on the week by 6%. We suggest using a setback of 50 cents to add to longs or for fresh long entries. Most clients will be trading either December futures or December call spreads. Marc Faber, Jim Rogers, David Hightower, Dennis Gartman, even Matthew Bradbard are all looking for Agriculture to grind higher in the months to come. Use set backs as buying opportunities. We will do some research on currencies over the weekend and hope to come back with some analyses and possible trade recommendations, check on our posts next week.