e-Traders Club

Our stategy for the year is to short US and European stocks while we go long on oil.   Oil prices has doubled since last year and there is no sign of  reversal for the short term.

Daily oil demand is 87 million barrels and supply is only 85 million.   It's no surprise then that oil price will keep on increasing till the end of this year.  Supply is very tight and with the hurricane season just lurking on the sides,  the trend for oil is bullish

It's a no brainer then that we have been holding long positions on selected oil companies and  substantial profits have been made.   However be careful when entering  long positions on oil.  You might buy on a price that is about to fall and you will lose money instead of making profits.

We are shorting some airline stocks and we also made a killing here.   With oil at prohibitive prices,  operations costs will spiral, inflation will go up and less people will travel for holidays this summer.  Several airline companies have already lost an average of 70% of their value since last year.  This is not about to reverse in the near future.

Credit crunch in the US is not yet over, house prices will continue to fall in the next 2 years.  Financial institutions will continue to put up with foreclosures and negative mortgages.  Severe distraction of wealth will occur before the US economy starts to move again.

We are seeing a  global decline in US dominance, investors are fleeing the US dollars.    As US economy falters , China and India will rise.  The world no longer catches cold as US sneezes.   A new world order will arise amid these developments.  And how this will unfold remains to be seen depending on the policies of the new US administration on November. 

For now, it's gloomy for US and European stocks. Gloomy for those who only know how to buy and hold.   But very profitable for the traders who know how to buy and short!