Post by
valueplaysonly on Jan 16, 2011 10:38am
A good cross trade to make!
I have been advocating that there will be a see saw between commodity spikes and pullbacks for most of 2011. I have been buying US banks ( C, MS, BAC and buying long out of the money calls 3 months out) when I see weakness in gold and commodities). As they pull back ( usually because of US dollar strength ) my purchases made in Canadian dollars appreciate. I pick up both the stock and currenct valuation upside. As the banks run out of steam, I sell call options on them and go short and prepared to cover. I also then sell most of my call options at a premium at that point. Watch the US banks carefully this week ,especially Citigroup which reports on Tuesday. If C gaps up Monday or Tuesday I think commodity prices will fall again this week.I If C falters in price after Tuesday, commodities should start another rally and we may see another gap up past the old high of 14.5 cents. GLTA.