Postcards: Paging Warren Buffett... Please Report to Occidental Shareholders Meeting

The adage goes that you trade a trend until it breaks. That trend appears to have arrived.

But when the lights are turning 'round, and wheels are rolling on the ground
That day I'll burn this whole place down, when the circus comes to town.

Los Lobos, When the Circus Comes to Town

Dear Fellow Expat:

For the last two years, I’ve had a trade that I’ve loved more than anyone.

It was Warren Buffett’s Occidental (OXY) trade using put spreads.

For the last two years, Buffett has been buying Occidental repeatedly any time the stock hovered near $56. We called that range the Buffett Buy Zone.

But now… Occidental is in a free fall with the rest of the oil and gas upstream sector.

And Buffett hasn’t been acquiring shares.

What gives? Has the trade finally broken?

Or has a new opportunity emerged…

But first… a market update

The Bull Trap Cometh

And… there it is. Remember what I said on Monday? You have to be aware of this pattern when the signal goes negative. That short-term recovery - over two days - was part of a bull trap. It was short covering, with many traders thinking the worst was o…