Trade Alert: INTU (and full report on Gold vs Oil for the next five years)

For the more aggressive traders of you out there, take a look at buying some $INTU Intuit puts into the earnings report tonight. I think the TurboTax competition has heated up and as one of our TradingWithCody members noted a couple weeks ago:

$INTU TurboTax site is down right now…middle of tax season…on top of fraudulent returns and filing blockages. Intuit could get crushed next quarter wouldn’t you think? They do the vast majority of their business within a few months…

Now, remember that making a short-term trade before an earnings report using options is akin to gambling in some sense and know that I am doing this with just a tiny bit of my capital — buying some puts on $INTU that expire tomorrow. I bought a few puts with strike prices at $90. I’m talking about less than 1/4 of 1% (as in 0.25%) of my portfolio being risked on this bet.

And also remember that one of the reasons you subscribe to TradingWithCody is because I help you avoid overtrading and taking undue risks with your capital, so don’t do this trade if it doesn’t make sense for you.

Onto today’s report then.

I’ve been saying for a while now that I don’t see any reason to try to game a bottom, or any type of trade for that matter, in oil/energy.

We’ve made a lot of money and avoided a lot of heartache over the years sticking with our strategies. Unless oil drops to like, say, $20 a barrel and there’s a wave of bankruptcies in the sector where we could go in and buy the survivors, I’m just not interested in playing energy/oil. $Oil is down 33% in the last three months. I doubt that it’ll be down 33% from here when we look back in three more months’ time, but I don’t know that we’ll see the $75 level from just 90 days ago for many years to come.

Even if and when the bankruptcies come, I’m not going to be looking to rush into energy stocks as I’d outlined in, “Don’t buy energy stocks until the bankruptcies start.”

I wouldn’t say that a major oil company going bankrupt would be “the catalyst” for a permanent uptick in oil prices and/or a great entry point for investing in oil/energy stocks. I do think there will be bankruptcies in the energy sector before it bottoms. I simply want people to understand that oil/energy/commodity cycles can take years or decades to play out and that bankruptcies are part of being in business, especially in cyclical commoditized industries.

On the other hand, let’s look at the setup for $gold over the next few years. The fundamentals all point to higher gold prices in coming years as the 0% interest rates, QE, and all the other games the Fed and the Republican-Democrat regime have played with our money. That said, for the near-term, the dollar being the go-to safe currency — in a world where every major country is trying to devalue their citizen’s money — could keep a lid on the price of gold.

Compound all those economic tailwinds for gold with the fact that the miners aren’t producing much gold these days at these prices while oil supply continues to come on line even at these lower prices and you’ve basically got the exact opposite setup for gold that you do for oil.

I built up the bulk of my gold position a few years ago and am holding it steady for now. I might add another tranche to my own gold if it were to get down closer to $1,100 or lower as I’ve been saying for the past year or so.

I’d sure rather own gold than oil over the next five years.