Regular readers know we like trolling through President Trump’s Twitter feed…

As the most powerful man on the planet, the president’s tweets can move markets. And we’ve done a good job identifying which sectors will benefit most from his angry missives.

We’ve used this strategy to successfully bet on President Trump’s tax cuts in January 2018, steel and coal in June 2017, biotech in March 2017, and financials in February 2017.

This is the latest tweet to catch our eye…

Here’s what got the president upset…

Oil prices have been surging higher in recent months. And last week, they hit their highest levels since late 2014. Along with Russia, Saudi Arabia has led the effort to curb production and lift these prices.

And oil prices aren’t done going up yet. In fact, OPEC members have said they want oil to go up to $80–$100 per barrel by December.

That means U.S. drivers could see the average national price per gallon of regular gas at the pump spike from $2.76 today to $3.34 by year’s end—a 21% jump.

This shouldn’t come as a surprise to regular readers. We told you on February 13 that behind the scenes, the Saudis have been working to increase oil prices (more on this in a moment).

Our goal at the Daily isn’t to referee political squabbles. Instead, we look for money-making opportunities that can boost your portfolio and cushion your retirement.

Today, I’ll show you why Trump’s latest Twitter feud means profits ahead…

Cartel Collusion

The president sent the above tweet last Friday after a key meeting between OPEC members and Russia in Jeddah, Saudi Arabia.

During the meeting, OPEC producers decided to extend production cuts through December 2018. That was the catalyst behind the 10% rise last week.

OPEC isn’t taking its foot off the gas pedal, either. In fact, one OPEC insider thinks that $70 per barrel will be the new floor for oil prices.

That’s what got Trump really fired up…

He criticized the cartel for “artificially” propping up prices… and warned the oil cartel that its actions were “no good” and “would not be accepted” by the White House.

But when it comes to oil prices, the Saudis usually get what they want. And right now, they want higher prices…

Let me explain…

Higher Oil Prices Ahead

As I told you in February, the Saudis plan to turn the state-owned oil giant Saudi Aramco into a public company. It’s part of the government’s goal to diversify and modernize its nationalized economy.

The Saudi royal family runs Aramco as a monopoly. It’s the crown jewel of the kingdom. And it’s how the ruling families make the money they need to stay in power.

They’re not going to sell off part of their golden goose in a down market. That’s why they need higher oil prices.

Here’s what I wrote in February:

You see, for an oil company to have a successful initial public offering (IPO), it needs high oil prices. And over the past seven years, oil prices have been falling.

Higher oil prices will make an oil company more profitable… And if the company is more profitable, investors will pay more to buy its shares…

OPEC plans to extend production cuts through 2018. I predict these cuts will last until Aramco’s IPO later this year or early 2019.

That means for the next year (or longer), we’re likely to see elevated oil prices. And this is good news for energy companies.

The easy way to play this trend is the Energy Select Sector SPDR ETF (XLE).

That’s the same play we recommended on February 13. Since then, it’s up 9%. And if oil prices keep rising, the big energy companies in XLE will continue to march higher, too.

Regards,

Nick Rokke, CFA
Analyst, The Palm Beach Daily

P.S. Tomorrow, I’ll tell you how OPEC’s production cuts will create an opportunity for U.S. shale companies…  

Meanwhile, let us know if you’ve followed our strategy and profited from President Trump’s tweets right here. 

CHART WATCH

The Final Decline of the Correction

By Jeff Clark, editor, Jeff Clark’s Market Minute

The stock market ran into resistance this week, and now it’s turned back.

It looks like the bear is taking another swipe at stocks—sending them back down to their February lows… or even lower.

Take a look at this daily chart of the S&P 500…

The bears have been in charge since late January. That’s when the market broke down from a parabolic move and entered a correction.

Corrections tend to play out in either three or five moves—what technical folks call “waves.” The first leg down for this correction happened in early February (point A). Then we got the rebound to point B on the chart—which formed a lower high and completed the second wave. The late March decline, which retested the February closing lows, was the third wave (point C). The rally off the March lows was the fourth wave (point D).

It appears we are now in the midst of the fifth wave of this correction phase.

The good news is this should be the final wave for this correction. The bad news is there’s no telling what price level this wave will end at…

For now, this is just a correction. It’s not the start of a bear market… yet. So, I’m still looking to use this correction as a chance to buy stocks when they reach extremely oversold conditions.

—Jeff Clark

P.S. If you’d like to receive my free daily market insights, Jeff Clark’s Market Minute, click here and I’ll automatically add you to my list. You’ll also receive a link to my “Guide to Options Trading” just for signing up. This free report will teach you how to trade options the right way… and dramatically boost your overall returns.

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