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Target Change on XLE Put

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XLE Target Change

The initial targets on the XLE put were $67 and $64. Because of the complete washout of the stocks in the energy sector even when oil is hitting new historic highs we are very close to the initial target. I am changing the targets today because I believe we are setting up for an even lower range once oil itself begins to weaken.

Let's lower the initial target on the XLE to $64 with a secondary target of $60.

We are still a long way from the peak of hurricane season on Sept-10th and anything can happen. The -6.5 million-barrel drop in crude inventories this morning is simply the result of more refineries coming back online and depleting supply. There were3 also some timing issues for imports. The price of oil spiked to $78.76 a new all time high before collapsing back to $76.55 on profit taking. If crude can't sustain its highs on a -6.5 mb drop then the buyers must be getting nervous.

Lower the target on the XLE and we will watch for hurricanes with some serious profit already accumulating on our TSO, CVX and XLE puts.

Jim Brown

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