if not uso, what do you recommend then if i want to make along term play on purely oil (ie: not oil companies). How about shorting the dto instead?
With DXO you have to look not at the current contract, but the forward month. So for now, DXO moves according to the April contract (which expires March 20th). On the 2nd-6th of every month, DXO is moved by 20% per day to the following month's contract. So by March 7th, for example, it will be trading on the May futures contract. Then if that contract keeps going down in value, DXO will keep going up. Here is yahoo's page on the April futures contract.
Now is not the time to be in oil. Wait until the supply and demand numbers go in your favor. OPEC will need to cut production, and then it'll still take some time to work off the excess of supply currently in the system. The numbers might not swing favorable for months or years. One thing is for sure, you do not want to be in USO right now. It is not the right play for oil in the long term.
I don't recommend, I dissuade. I did mention UAG. Gasoline. Head & shoulders bottom (but ONLY on a point & figure chart). As for oil, USL rolls over differently. Research it. However, volume is a mere fraction of USO. Hence wider spreads. You seem do be itchin' for action. Isn't that FORCING a trade where none's there? (Presently). Totally unrelated, I believer there's a secular change transpiring in long treasuries (the volatile end of the yield curve and comprised of a Japanese and Chinese presence). Probably unlike you, I remember 1981 (a year before the bull in equities). That would be eh.....recommendation.
================== a]Also USO[fund] has discretion to use 10% to buy gasoline, nat gas...; so it NEVER was designed to track crude contracts exactly[see prospectus] ========================================= b]I would agree, with thee, effoiciency- & seldom make a countertrend comment. But while i did call Citigroup buying a 2009 tanker full of oil probably '' bearish''[see previous posts]. Technicaly some 2009 buys looked good ,& also tankers full done by buyers/longs,in 2009 were done perhaps wisely,by Shell Oil Co, MS. c]Counter -trends i seldom do,[long USO,DXO is countertrend until it closes above 50dma/trend ] simply because i like the percentages that favor Trends. So Citigroup buying oil in 2009 maybe wrong;Shell Oil & Morgan Stanley doing the same maybe profitable. %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% PS -if one keeps record of his counter -trend profits; compared to trend profits, you will see why i seldom make a counter-trend call.
sorry for lame question...but what does contango and "5 bucks" apart mean ? if now is not a good time to get in, then when would u suggest to get in ? thanks for the help and information