DCR will cease trading on June 25: http://www.marketwatch.com/news/sto...x?guid={BBA804B8-513B-4A1C-875D-D424DCB1ED4C}
So what is the real oil play, short EMs? Setting up for a failed retest of the top in EEM? I think the trade has possibilities.
Let's recap: 1. You're long DUG - an ultra short Oil/Gas ETF - averaging into a broken chart making new 52w lows. 2. You're long some airline, which is basically a synthetic oil put. Needless to say, another terribly broken chart. 3. Your long DCR which is a short crude oil ETN. Chart a disaster. Down 10% today. Here's a trade suggestion: Why not go long some USO deep in the money puts? Can't hurt to pack on a couple more short crude trades just to 'diversify' a little
maybe it is an oversimplification, but it seems to me with the rapid growth of china and other companies we're not producing anymore oil, so long term it will keep going up. houses can be built, real estate developed, and corn grown, but of course oil in non renewable...demand is only going to grow over time and supply isnt. IMHO
Seems to me to be more of a when to short rather than a where. Once we get through the summer towards late July early August is my thought. Not that I really have any clue what I am doing in the oil markets, however. And for the record, if I do go short, I'm using puts. Despite how insanely expensive they are right now (and likely to get more so). How high it gets before there - beats me. No rhyme or reason that I can see.
No reason it has to fall precipitously and pretty unlikley given the fact that the recession already seems to be over, it is just as likley to find a new plateau which is why I prefer a play on the effects of high oil. Early days yet though, I agree with you on that.
Don't kid yourself. $120 per barrel oil creates all sorts of opportunities to drill and explore, and to do so with new technology. For example, Mexico is due to exhaust their oil reserves at current production rates solely because they refuse to allow foreign companies into their country to "partner-up" with Pemex. That's not a reflection of a lack of supply. That's a reflection of a bureaucratic mess in the Mexican legislature that hinders their ability to grow their economy in the 21st century.
This statement will go into the ET annals for use later. I noticed in the Goldman Sachs report on what's happening in the crude market they say that although US gasoline consumption is down (or will be going down, or whatever) that nobody cares because it's apparently the mid part of the refinery crack that is really in demand world-wide -- Diesel, Jet Fuel, etc. -- Probably too late to short airlines that failed to hedge their fuel costs, huh?