Bolling: Iran Talks Can Help

Although the meeting produced few break-throughs, I am not surprised and not concerned. I think the mission was accomplished the minute our man landed in Geneva with Jalili. The message was sent to the intended recipient.

The oil market, however, did not get that same message, as oil is trading higher Monday morning. That likely means that some traders believed the meeting failed.

I think they are misreading the meeting, its purpose and its consequences. For me, it temporarily relieves a big concern -- whether or not Israel will strike nuclear enrichment facilities in Iran.

If oil trades higher this week on the news that the Geneva meeting was a failure, I will look to re-establish a position that was very profitable for me recently. I recently bought the Ultra Short Oil & Gas ETF(DUG Quote). It represents a double short on the broad energy sector.

If the energy sector weakens again, DUG price rises. DUG settled at $34.25 Friday. I am hoping it trades down to $34 this week. I will be re-initiating DUG at or below $34.25. I will use $31.95 on a settlement basis as my stop-loss.

For those who have followed my current Goldman Sachs (GS Quote) and Financial Select Sector SPDR(XLF Quote) trade, I will look to continue to add to my profitable Goldman trade and sell out the XLF for a winner if the financials hold current values.

If it weakens, the XLF position will be liquidated, but I will continue to nibble at Goldman by adding a small amount on a dip below $165. As you may recall, I have been building a Goldman position recently from a high price of $180, down into the low $155-$158 levels. If it settles under $150, the whole position liquidates on a stop-loss, but I will hold the position on a rally toward $200, my objective.

Trade with your head, not over it.