I hold the minority belief that crude oil will reverse and fall steeply. I obviously can't exactly time this, but at the moment that I feel that oil has lost its edge based on some news or another factor, I believe all the bulls will take their profits and run. IMO oil has risen based on speculation. I don't think the fundamentals (demand, Fed's devalueing of the dollar) explain crude oils rise from the mid $40s in 2002 to $126 (today) six years later. I think it would be rather dumb to short crude oil ETFs in this bull market, however, particurarly because of the president's of OPEC and Sach's announcement that it may reach $200 dollars a barrel. I also don't feel comfortable shorting individual companies like Exxon Mobil. What are the best ETFs/ETNs that have an inverse relationship to the price of crude oil? I think the more conservative approach would be to buy these instead of shorting crude oil. I am not interested in specific companies, however, nor am I a fan of natural gas. I greatly appreciate any suggestions.
DCR as suggested, but no volume there. Short the USO fund. You can go long the dollar at a 75-80% correlation.
DUG is close but not exact since it trades opposite of ^DJUSEN. DUG is tied to oil companies, best way to take advantage of this is to short USO, I would but there seems to be no shares available. Again DCR is a way but you really have to understand how it trades before buying, they are coming out with a new one at the end of JUNE based off of $100 oil which will begin trading around $25 a share, those will probably be popular since many are looking for some way close to short oil.
Another new ETN just started trading May1st, DEE, its a 2x Ultrabear Commodity play on: crude oil, heating oil, aluminum,gold, corn and wheat. Here is the info: http://www.dbfunds.db.com/Notes/Pdfs/DB_Notes_Com_Offerings.pdf
I've been following DUG for a few weeks now and it looks like a good stock to trade intra day if that is your style. There are always options on USO. Something else I have noticed is that the EMs usually start topping out before oil does and can give a decent oil short signal and perhaps more importantly can keep you out of an oil short. A good site about oil fundies http://www.wtrg.com/prices.htm
UGA is another one US Gas (as in petrol) ETF. http://www.smartmoney.com/etf-focus/index.cfm?story=20080508-etf-investing http://www.smartmoney.com/invisiblehand/index.cfm?story=20080509-exxon-mobil Hmm doesn't this article suggest that it should be Gas prices going through the roof more so than crude, trades just like USO so far only cheaper.
# ############################################## 2 possibly dumb questions: USO is which exchange?? what are EMS?? Thanks for your help. Ch.