At the moment I am neutral on commodities.
One observation after the rate cuts by the ECB and BoE is....the GBP and EURO has not been declining as aggressively as expected. This is due to the recent bad economic news in the US in regards to the increasing losses in jobs and slowdown in the manufacturing sector.
At the moment the SPY is still not oversold at all, downside risk still remain. On the contrary, stochastics reading is also pointing to a possible resumption of the uptrend (note the divergence).
So I am anticipating a possible sideways trading or another huge move to the downside or upside.
I think at this point in time, oil stocks are a weak short. I experienced strong resistance while holding DUG at the 41 level, so I got out of my DUG positions. As of this morning, Crude Oil has rebounded by 0.89 due to traders covering their short positions.
USO has found some strong support at about 50, the stochastic indicator shows possible tight trading range moving forward.
Strategy:
Wait for a retracement to 98 then decide to go short. Buy small if it hits 84 or lower.
Stockpicks for long or short:
Long: TNA
Short: TZA
More updates later
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