The First Step in Trading Oil ETF's

Everyday I get emails and questions from traders and investors about trading crude oil using ETF's. And unfortunately most have had a bad experience with trading these ETF's based on crude oil futures because they did not do their homework first. Unlike equities, which entitle the holder to a continuing stake in a corporation, commodity futures contracts specify a delivery date for an underlying physical commodity.

Very important to understand is the Dow Jones—UBS Commodity Index. It uses the settlement prices for the underlying futures contracts. The DJ—AIGCI rolls its contracts over the course of 5 consecutive business days, starting on the 6th business day of the month. Each day, 20% of each futures position that is included in the month’s roll is rolled. Not all contracts are rolled every month.

Before you take another step trading crude oil ETF's such as DXO, DTO, SCO and UCO read and download "A Primer on Index Calculation and Performance".

Visit INO TV Options Channel

Waiting for Crude Oil to Reverse to the Downside

My optimal pullback target zone for the PowerShare DB Double Short Oil ETN (NYSE: DTO) is 82.00-79.00, which has been met today. However, so far the inability of the DTO to turn up with sustainability and leave little doubt that the correction off of the 7/13 high at 99.50 is complete is bothersome, and suggests perhaps that more corrective weakness is forthcoming ahead of my anticipation of a powerful upside pivot reversal.
Let’s notice that there is an unfilled gap from July 2 between 77.70 and 76.15 which might have to be satisfied.....Complete Story

4 FREE Videos from INO TV!

New Trading Video "USO and DTO"

I personally believe that "don't trade alone" is more then a cliche. Sure there is plenty of easy moves, but for those trades that are large and critical, I never make a move without visiting the websites of my favorite traders and bloggers.

Lately one of my favorite traders is Salvador Lara. He has been, to use a cliche, hitting the cover off the ball!

Check out his latest video on the USO and DTO.

Click Here To Watch Salvadors Video

Crude Inventory Numbers Spike Up

Crude oil inventory numbers took a big jump up on Wednesday with crude levels up more than 6 million barrels. A much larger gain then analyst predicted. This combined with a potential cease fire in the middle east has crude dropping more than $3.00 per barrel within minutes of inventory numbers being released at 10:30 eastern time.

Congratulations to all the traders out there that went short yesterday or this morning, make sure to take your profits. The DXO [long crude] traders will surely be looking at this as a buying opportunity and will be more than happy to strip your profits from you. First support is $44.05.

As I click the publish button on this blog post crude has fell $3.83.....is this fun or what?