≈ Oil is on Fire ≈

Coach Mark from the Cash Flow Vikings here. Oil has been on fire lately and traders and investors that have been in energy stocks in recent weeks have been rewarded no matter what strategy they have been using. Of course, the question on every trader’s mind is not what has happened but what happens next.

Naturally, I do not have a crystal ball but I do know that strong moves can occur on breakouts of historical levels like oil recently had and as such, I want a piece of the action. Even though I primarily focus on cash flow strategies, I want to maintain some directional exposure to energy stocks at all times as long as oil maintains the breakout pattern in case this is another example of an area of the market having a strong run like so many areas of the market have had over the last 18 months. However, I also know that markets can be fickle and never want my financial future nor my ability to manage my account in the short-term responsibly determined by any single play…that is just insane to me.

For me personally, the balance in this situation is maintaining a level of directional exposure that can produce reasonable returns but have this overall exposure be such that if things were to turn south tomorrow it doesn’t mean anything in the larger picture. It also means having a detailed plan on what signals produce a stop loss or aggressive cash flow defensive management plan.

That is how I am playing the oil run. Not too greedy. Not too fearful.

Chart of the Day

Crude Oil Futures

Crude oil futures are up again heading into the market open and the energy sector is the only sector in the green in the pre-market action. The pattern has been quite impressive.

Video of the day

JEDI Options

Coach Tim teaches the Bear Call Spread options strategy using the Russell 2000 Index $RUT in this Jedi Options educational video.

Today’s line up

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