Update on Oil and the US Dollar Ahead of the Fed

Here's how we're adjusting

On Friday, we flagged a potential setup in oil, whether that was in /CL /QM or the USO ETF. 

Now I just want to flag a quick update here ahead of the Fed, because I’m sure things are going to get busy here after 2pm ET. 

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Previously we had said the “$89 to $90 region would warrant a trim, followed by $93 to $94.” 

Well, we are there as /CL is currently trading $90. 

$3 to $4 in profit in /CL is a nice hunk of change — as you know, we’re talking several thousand dollars per contract.

The Update: I would be trimming, at the very minimum, 1/3 of the position. However, going down to a half position or even just a 1/3 position is somewhat prudent. 

While the action out of oil does look constructive, the Fed can really move markets and I don’t want to cough up what we’ve already made. With that in mind, I personally like a half-trim here (at least) and a break-even stop-loss.

There’s also nothing wrong with blowing out of the entire position here and booking all gains. 

Oil

If /CL continues to run, $93 to $94 could be the next trim zone. 

As for the US Dollar