I was stopped out of the DXO ETF position I told you about a few days ago. I re entered today however at 2.32 and will be more flexible about how much downside I can take here.
The problem with these double and triple type ETFs is the enormous volatility. Timing really needs to be razor sharp and the amount of noise that goes on before the ETF actually goes in the direction you want it to can be costly. However I am still bullish on the DXO ETF and believe a new more sustainable uptrend will be soon starting.
As I mentioned before, crude oil is sitting on a very long term support line and the risk seems less and less to the downside. Now if we can get the general equity markets to recover a bit it will go a long way towards bouncing crude oil back up to 70 dollars. The 70 dollar area is actually where I am looking for the bounce to lead to as a first stop. That would put the DXO ETF somewhere near the 6 level.
My tendency is to sit tight and be right with this one. The next major battle is at the 3.7 area where it failed the last time. If we can take out 3.7 then it opens the door eventually to 6.
Certainly a warmer spring and summer season could help us along in the DXO. I sure would not mind that either since even now in March it is still very cold up here!
Guys can I get some advice. I am very long on oil and belive we will reach $200 in 2 years, take a look at Youtube and listen to Matt SImmons.
My question is, is DXO a good way to play this. My trading is based on Fundamentals and not technical. My concern is that the underlying future contracts are rolled over and ina rising marker value is lost as you buy fewer barrels. I hope this makes sense.
To be honest with you, I really have my doubts if crude oil will be able to get all the way back up to 200 within 2 years. Part of the reason why I am skeptical of that is because of the nature of the severe beating it took. For it to go all the way back up to 200 in only 2 years would be a very tall order.
Now if you told me it will get there in 5 to 7 years then you may get my attention, but for now this is my take on it.
As far as DXO, my understanding that it is best to be used as a trading vehicle, not a long term buy and hold. However I do not see why you could not just buy and hold it, perhaps someone else has some thoughts on this?
Good Luck.
in jan i bought into dxo, i bought at a weird time because i went in at 3.80 i noticed it was flexuating at a daily basis, so at 2.80 i put in another 20,000. it seems it will go down in june sometime? at that time i think i will sell my 50,000 and purchase it when it hits below 2.00
any comments please help? may 28 2009
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