timwest
Long

GOLD GLD IS LOW RELATIVE TO OIH - Oil Service Stocks

AMEX:OIH   VANECK VECTORS OIL SERVICES ETF
220 8 9
The ratio (in light blue) between GLD             and OIH             is at the bottom end of the past 5 year's trading range and is turning up a little here. It could be the start of something and if it isn't, the risk is small.

Look for GLD             to outperform OIH             ( Oil             Service Stocks ) for the next 3-6 months by 10-15%.

Tim

3:30PM EST Wednesday, May 14, 2014
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AYosof
2 years ago
I am guessing you are saying sell oil buy gold?
+1 Reply
timwest PRO
2 years ago
The "BUY OIL" in the graph means that people have "BOUGHT OIL" and drove it up. Meanwhile, the chart says "SELL GOLD" to display that people have "SOLD GOLD".

SORRY for any confusion. The conclusion is to BUY GOLD now and SELL SHORT OIH and look for relative outperformance of GLD versus OIH.

And, keep in mind, I expect OIH to do better than SPY... so.... you could also go long GLD and short SPY.
+1 Reply
AYosof timwest
2 years ago
Thanks as always nice explanation.
+1 Reply
oluies
2 years ago
Agreed, Fracking stocks also looks a bit bubbly to me
snapshot
+1 Reply
timwest PRO oluies
2 years ago
Excellent charts - thanks for sharing
Reply
TamirHa
2 years ago
hello tim,
thank you for your ideas

how do you see oil (crude)?
Reply
timwest PRO TamirHa
2 years ago
I have a lot of thoughts about crude and where it is going long term, but I don't have a trade "setup". If I had to trade crude for a living, I would be selling 10-25 days new highs and I'd be buying on 10-25 day lows and act as the "marketmaker" over the longer term. I view crude as being far too volatile a commodity for what the market really is. So, capture volatility in crude and sell strength and buy weakness and take advantage of the unnecessary swings up and down in crude oil.
+2 Reply
timwest PRO
2 years ago
RE-STATING what is above "Look for GLD to outperform OIH (Oil Service Stocks) for the next 3-6 months by 10-15%"
+2 Reply
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