Alert: speculators getting extreme

21 September 2012

Let's add some positions to target a reversal in crude and silver.

The CFTC's Commitment of Traders report shows large and small speculators are extremely bullish on crude oil, silver and gold. Typically, these speculators are wrong when the positioning levels reach extremes.

I think now offers an excellent opportunity to grab some downside in crude oil and silver prices, using DTO and ZSL. [For those who prefer avoiding double-leveraged ETFs, consider selling short USO and SLV instead.]

Trade Essentials.

Here is what I suggest you consider doing now:

 

DTO (Last price: $43.14)

Buy shares of PowerShares DB Crude Oil Double Short ETN, symbol DTO, at the market. Then place an order to SELL ALL shares of PowerShares DB Crude Oil Double Short ETN, symbol DTO, at $39.49, STOP; this order is good till cancelled.

 

ZSL (Last price: $40.10)

Buy shares of ProShares UltraShort Silver ETF, symbol ZSL, at the market. Then place an order to SELL ALL shares of ProShares UltraShort Silver ETF, symbol ZSL, at $36.89, STOP; this order is good till cancelled.