S2 Option Trader

[plashadpobedy]

Divergence between crude & oil stocks

Divergence oil stocks vs. crude
The oil stock's ascent seems to have peaked and gone into a rolling sawtooth at a top. While crude, USO futures ETF for crude is still going up (to a new high). "Sometimes" (in the past), crude has continued up, while oil stocks have gone the other way. Other years, oil stocks kept going up (to buoy the market), while crude fell.

Crude still going up.......
The US0 JUL11 PUTS (futures ETF for crude) are expensive considering the deltas, barely .60 for 3 strike ITM. I think, "oil stocks" (i.e. OXY) have topped, but there's no way to tell when they will finally correct down. USO gapped up again today.

Per the seasonal chart for crude, April is the topping month, then it's heads back down to mid-July.

I'd sure like to catch the roll down (timing) on energy stocks.

Market "Stabilized"???
Yeah, I think, this is what a "stabilized" market looks like. POS!