Oil’s going lower!
All the experts keep telling me it’s not, though
They told me this when it broke below $100, then when it broke below $90, and now that it’s down below $80.
I’m not an expert when it comes to oil, but I’m also not some bubble-headed girl who insulates herself from the harsh realities of the world. The truth is, I love following geopolitics. I love knowing what’s going on in the world – good or bad. Not only does this assuage my desire to feel connected to the global community, but it gives me an advantage when it comes to investing.
Now one thing I’ve figured out is that oil prices are definitely going lower because the two strongest petrodollar powers in the world are working together to destroy their enemies.
Gold is Cheap!
Some may write this off as a conspiracy, but I don’t care. I’m not stupid, and I don’t believe for a second that any government acts or re-acts without a long-term plan in mind.
Saudi Arabia and the U.S. are putting on a great show, trying to convince the world that they’re playing a deadly game of chicken. But it’s a ruse. It’s a con. And the end game is to crush their respective enemies.
With oil prices collapsing, Russia is getting destroyed. The Ruble is turning rubble. This benefits the U.S. immensely. Equally exciting for the Saudis is that cheap oil handicaps their less-than-friendly competitors in Iran and Venezuela.
The bottom line is that Saudi Arabia is doing what is necessary to maintain its position as the HNIC in OPEC. And the U.S. is doing what it has to do to teach old Vlad Putin a lesson. Despite the fact that it could actually backfire.
But that’s neither here nor there. The only thing I’m concerned about right now is playing this sick and twisted vaudeville act for everything its worth. That’s why I’m shorting oil and buying gold.
I’m shorting oil with the ProShares UltraShort ETF (NYSE: SCO). It’s a pretty simple trade, and I like its exposure. If you’re going to go for it, go big!
For gold, I like gold SPDR Gold Shares (NASDAQ: GLD) and also a couple of the smaller, cheaper plays that have the most room to grow after being beaten down so much this year. I like Alacer Gold Corp. (OTCBB: ALIAF) and Harmony Gold (AMEX: HMY). There are plenty others out there, but I’ve been following Alacer and Harmony since the gold market began crashing.
I expect to get at least a 40% to 50% gain on these two.
My prediction for oil is a bottom somewhere between $35 and $40. I’ll probably bail the second we break $40. If not sooner, depending how the politics of all this plays out.