Direxion Daily Energy Bull 2X Shares (ERX)

[Toofuzzy]

I can't wait to fill up my car and have them put money on my credit card.

The fed govt should buy oil and say " just leave it there"

Toofuzzy

[zsvq1p]

UCO might be better one... Good luck. I bought 2K shares ERX pre market $11.35 but sold at $12.60's... not bad.. but play slots at the casino too.. when they were open.

[Smilin_B]

Just picked up 10k UCO @$1.30 as a gamble into the RS

[zsvq1p]

$0 Oil Forces Canada To Shut Down Crude Production

By Irina Slav - Apr 20, 2020, 9:00 AM CDT


Oil sands
Canadian oil companies have begun shutting down steam-driven oil sands production projects as prices continue to fall, Reuters reports, noting the move could have dire long-term consequences for the production facilities.

Steam-driven oil sands production, also called steam-assisted gravity drainage, involves injecting steam into an oil sands deposit to melt the bitumen and make it flow up the well. To ensure long-term production, the temperature and pressure at such sites must be maintained at a certain level. Disruption, Reuters explains, could result in permanent damage, which would translate into a permanent loss of production.

Yet Western Canadian Select, the heavy oil benchmark of Canada, has been trading below $10 for about ten days now, with a temporary spike to $10.13 a barrel last Thursday. At the time of writing, WSC was trading at $-0.01 a barrel.

[zsvq1p]

Producers are paying $2 a barrel for anyone who will just take delivery.


https://www.wsj.com/articles/why-oil-is-11-a-barrel-now-but-three-times-that-in-autumn-11587392745?

[totffe]

Maybe because it is tied to oil stocks as well as crude, and they are up since then?

[surf1944]

ERX back on watch!

[Smilin_B]

Concerning the ERX, its interesting that june crude is approaching that $22/$21 level. The last time we were there, ERX was in the $5's yet its trading more than 2x that right now.

[zsvq1p]

Mods fixed board title

[zsvq1p]

Target Index
The Energy Select Sector Index (IXETR) is
provided by S&P Dow Jones Indices and
includes domestic companies from the
energy sector which includes the following
industries: oil, gas and consumable fuels;
and energy equipment and services.

They use swaps to try and achieve 2 x's that index.

This ETF typically follows oil but not always. The other day stocks were up yet oil was down. It follows energy stocks.

[Smilin_B]

June crude $22.09/barrell

[Smilin_B]

Front month WTI $14.09 (-23%)

[Smilin_B]

CLK20 april crude is $15 a barrel right now

CLM20 june crude is $23.64 a barrelltight now

It's heading to $20 like i said last week

Avoid the USO/UCO unless u are daytrading them

Contango/forward roll is what kills these ETF's

[totffe]

The elephant in the room is a resurgence of the virus once we think the way is clear. We know now that it dies in sunlight and humidity, so is probably seasonal like the flu. But, unlike the flu we will not have a vaccine anytime soon, and we know that corona is much more contagious than the flu. So, by next flu season will we be coming back to economic life again and with that oil demand? Then wham we are hit again. Hard to call the timeline of just about anything right now. So, I watch crude prices crumble, WTI in particular and will react at the time that i think is appropriate. Planning is 50% useless right now. Who would have thought that with oil prices headed south that the big oil companies stock are soaring. That is pure speculation that demand will return soon. Stock prices forecast 6 months into the future, so maybe they are right, but I don't think so. Can't wait to see futures Sunday night.

[Smilin_B]

Yes UCO , but it is reverse splitting 1:25 on tuesday so it's one of those ETFs that will be super expensive if crude oil does bottom and starts to reverse trend again. I just don't see that happening to crude oil right now. All of the coronavirus and Gilead treatment stuff is propelling the market forward but crude oil check it out of its own way. There was just simply too much of it no amount of positive news about treatment for Coronavirus or people going back to work anytime soon is going to eat into that Supply.

ERX had a 1:10 recently i see. What an incredible run up its had over the last week or so. I completely botched by not knowing this fund existed. Hoping for some type of a retracement but not going what the Catalyst will be. Clearly this does not trade in tandem with the underlying commodity crude oil. I'm suspecting that this fund intent on taking advantage of the consolidation that could occur if our us frackers call Michelle producers and refiners file bankruptcy and these companies that the fund holds approximately 80% of institutional stocks in, takes over the smaller companies

[totffe]

What is your favorite ETF to "catch the bottom" of WTI? UCO?

ERX

The investment seeks daily investment results, before fees and expenses, that correspond to two times (2x) the daily performance of the Bloomberg WTI Crude Oil SubindexSM. The fund seeks to meet its investment objective by investing, under normal market conditions, in futures contracts for WTI sweet, light crude oil listed on the NYMEX, ICE Futures U.S. or other U.S. exchanges and listed options on such contracts. It will not invest directly in oil.

[Smilin_B]

ETF's that play strictly crude oil, still have to deal with the effects of contango and forward roll of expired contracts. Unless you're talking about getting into a 2x or 3x bull ETF specific to crude oil oh, yeah you would have to time that bottom exactly perfect because by Design these things could easily go to 0 if crude oil heads to $15 a barrel.

Im mildly interested in ERX but would like to see some type of a pullback as it advanced 21% Friday alone. I'm a big fan of the June crude contract falling down from $25. The global oversupply of crude oil meeting the catastrophic under demand due to the Coronavirus it's just staggering and it is going to take many many months 2 even begin to touch the Strategic petroleum reserves we have here in the United States. We have so many tankers out in the ocean filled to the top with crude oil and we are paying exorbitant storage fees. That's the reason why these ETFs continue to tank and most definitely are not long-term investment vehicles by Design. You have to really catch them at their absolute bottom and hope that crude oil makes an upturned quick because if it just goes sideways, these ETFs experience severe decay due to contango.

[totffe]

Storage is full in most of the country. Frackers are shutting down and will be all but gone by May. Then it becomes strictly a demand game. When demand returns, history shows that oil price recovers spectacularly fast. Trying to time the bottom might be easier this time around. Oil company stocks will (have) anticipate a return to normal, but ETFs that play strictly crude might offer a golden opportunity. Patience :)

[Smilin_B]

Although I believe the ERX is no longer a 3x ETF but a 2X

Why does this forum still say
Direxion Daily Energy Bull 3X Shares??

https://finance.yahoo.com/news/change-investment-objectives-strategies-ten-123500387.html

For more information on all Direxion Shares daily leveraged ETFs, go to direxion.com, or call us at 866.301.9214.

[Smilin_B]

This post is about crude oil and USO/UCO. Sorry for any misspelled words or typos but I'm using voice to text. I asked this post be allowed to remain up even though it is not related to the Direxion daily energy bull 3x. I would however like to ask those more knowledgeable on the ERX, why it has romped up so much when the front month contract for WTI crude is $18/barrell? I realize this is a basket of petroleum companies and I would assume that earnings from these companies are going to be atrocious moving into the next 1-2 quarters. Anyone else expecting a substantial pullback on the ERX? Or is the ERX moving up in anticipation of the smaller recliners having no alternative but to file bankruptcy, leaving room for the majors to buy them out at Pennies on the dollar?

Ok...now my rant

The bottom line here is that the Saudi/Russia production cuts are simply too little, too late. Our Strategic Petroleum Reserves are presently at tank top levels and the majority of our ocean tankers are filled to capacity. Storage costs, contango, U.S. shale producers unwilling to cease production of WTI Crude and ofcourse the roll forward of USO/UCO expired contracts to the next front-month are creating substantial decay and loss for ANYONE long these ETFs

The world demand for crude oil used to be 100 million barrels per day.

That obviously is no longer the case and we are building up a surplus and our tanks are literally overflowing. Crude oil is literally cheaper than water at the moment oh, and what I don't think anyone understands is that Saudi Arabia is profitable pumping crude out of the ground and selling it for anywhere over $4.50 a barrel. So they don't really give a shit. I believe they produced 36% of OPEC oil. We produce around 12 million - 13 million barrels per day here in the United States. Our shale refineries need to shut down, as there simply is no where else to store the oil. Many refineries will have no choice but to file bankruptcy and of course consolidation will occur.

USO/UCO are they trade or swing trade vehicles exclusively. If one were to be inclined to buy and hold either one of these, it would be my opinion to wait for the June contract (/CLM20) to sell down to $20/barrell. It is presently $25/barrell and it is my opinion that crude oil may have another 10% - 15% Spike if the economy begins to reopen but it would be considered a bounce in a bear Market trend for crude oil. I do not understand nor comprehend at all how anybody on this forum or anywhere else thinks that crude oil it's a certain number and then a v-shaped recovery occurs. There's simply too much inventory here in the United States and we are suffering from a catastrophic midterm decline in demand that started many many months ago before the Coronavirus.

UCO is reverse splitting 1:25 on tuesday, and it is my firm belief that no one will be interested and it because it will be Trading in the $35 - $40 area. People like the cheapy price, not $35-$40 even though it's just a mathematical equation. Unlike a common stock, the reverse split here should actually maintain it's stated design by tracking the percentage gain of crude oil by a factor of 2.

The only time I would consider purchasing UCO is if crude is down 10% and UCO is down say 25% , for a short term bounce/realignment with the front month price.

The only other time I would consider purchasing either USO or UCO is when the bottom in oil falls out and heads toward $15/barrell. I'm not sure if we will get that low but U.S. shale producers would have to shut down completely at that point.

Again, the less seasoned crude oil investor or shall I say most people that are used to trading stocks and don't know much about crude Futures, are assuming you can purchase these ETFs and simply hold on to them. That is the furthest thing from the truth. By Design, these things literally can go to zero. Think about something for a moment. If crude oil goes from $20 to $10 , that is a 50% decline for the USO but a 100% decline on the UCO.

This means the UCO goes to zero and would need to reverse split again or be dissolved like so many of the other ETFs recently.

I will TRADE the UCO only because USO is too slow and can't get out of its own way.

I will GO LONG the UCO for a mid term hold when there is physical and convincing evidence that the global economy and the Nationwide economy is about to recover and we will begin to utilize our SPR ( strategic petroleum reserves).

Again, a month or so ago, I was not this knowledgeable about this particular ETF but through research and spending a great deal of time understanding the Dynamics of how this exchange traded fund loses money over the course of time come by due to contango and the forward role of an expired contract into the next front-month, it remains patently clear that it is a day trading or swing trading vehicle only until the price of crude oil stabilizes, makes a new base and then begins to reverse Trend to the upside. That is when you go long this for the mid to longer-term.

I know that you have sent me a lot of other messages and I will try to read those, time permitting. Let's create a nice list of ETFs as well as index funds exclusively designed to take advantage of the lower prices of crude oil with limited exposure to the effects of contango and forward roll.

[JohnCM]

The only time to buy USO/UCO etf's are on the temporarily oversold conditions in crude when a bounce is anticipated.

I believe UCO is a bit different than overbought and oversold. UCO tracks CRUDE only, not the producers. CRUDE is not oversold or overbought.

CRUDE, as you know, is simply supply and demand. Right now the world is extracting 32.5 million gallons of oil out of this earth each day beyond what the demand is.

Thus, $18.00 crude. In addition storage capacity is going to be maxed out. Certain areas of the country already are experiencing negative profit margins.

The question is, when is the date when storage and demand are so bad, right before demand starts to pickup?

My guess is late May, early June. This will still not be a great time for oil producers, but at that time the spot price (WTI) will slowly recover from $15.00 (my guess).

[Smilin_B]

The only time to buy USO/UCO etf's are on the temporarily oversold conditions in crude when a bounce is anticipated

[JohnCM]

Index Top Ten Holdings %

Exxon 22.38
Chevron Texaco 20.36
EOG Resources 4.63
ConocoPhillips 4.50
Schlumberger 4.48
Phillips 66 4.28
Kinder Morgan 3.91
Marathon Petroleum 3.71
Valero Energy 3.65
Occidental U 3.49

[JohnCM]

Looking for a way to play the BULL off the WTI bottom.

All of the producer ETF charts have been heading higher. Not sure about USO. I guess I would have to time that one right.

I do not trade options, commodities, per se. Only ETF ETN funds, when I am not a stock picker.

[JohnCM]

[Smilin_B]

Oil at $17.50?

Clearly you're looking at the Futures contracts for April (CLK20)

We are trading June futures now (CLM20)

When referencing crude oil oh, you need to be referencing the June contracts

[country boy3]

Agree

[todamoon]

ERY should of had a great day and it’s down and this is up after oil gets crushed! Doesn’t make sense

[country boy3]

Can someone explain what everything ERX entails? It’s up 16% and oil is at $17.50.

[DeafTrader2]

Beast Mode ! MultiBaggas Soon

[zsvq1p]

Nice one baggier if you bought on the 24th...

[pay streak]

The demand is just not there and the market has been flooded

[MWM]

Oil jumps as Trump talks up truce hopes for Saudi-Russia price war https://www.cnbc.com/2020/04/02/oil-markets-saudi-arabia-russia-oil-price-war-in-focus.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard

[MWM]

I loaded up on ERX Calls yesterday! Would love to see a move back to $15-$20 over the next week!

Seems like a lot of accumulation since the 24th!

[zsvq1p]

Volatility causes the objectives not to be achieved..

Funds may incur higher costs and may be forced to purchase and sell securities at market prices that do not represent their fair value or that result in differences between the price a Fund receives for the security or the value of the swap exposure and the market closing price of the security or the swap exposure. Under such circumstances, a Fund may have difficulty achieving its investment objective for one or more trading days;

[Toofuzzy]

Gee just when you would want MORE leverage at the bottom of the market they go and change it.

Toofuzzy

[zsvq1p]

Not anymore.. it is now a 2X..

"Direxion will ratchet the Direxion Daily Energy Bull 3X Shares (NYSE: ERX) and the Direxion Daily Energy Bear 3X Shares (NYSE: ERY) down to 2x status."

https://finance.yahoo.com/news/direxion-accelerating-shifts-10-etfs-205414330.html

http://www.direxion.com/leveraged-inverse-etfs?filter=dailybullbear2x

[Toofuzzy]

It IS a 3x fund

Toofuzzy

[zsvq1p]

The moved that date.. it was yesterday they moved to 2x

[pay streak]

Doesn't the 2x start towards end of may?

[zsvq1p]

I'm keeping my powder dry.. until I see the virus situation improve.

I do believe oil is at the bottom... We have a lot of factors:
- Demand.. how long will it be before people can go back to work
- Saudi and Russia conflict (agreement might pop it)
- Trump buying (keeps thing artificially high)
- Trump offering storage (keeps thing artificially high)
- The smaller producers debt
- Producers cutting output

When I start.. which might be in another 30 days.. I will enter little by little every month.. with no fear. when this pops... IMO, it most certainly will be a 1-2 bagger. It's too bad it's only a 2x and not 3x's.. but Direxion might have gotten smashed on this one with losses due to that wild ass swing we had.

ERX tends to follow oil but it is skewed right now...

Index Top Ten Holdings %
Exxon 22.38
Chevron Texaco 20.36
EOG Resources 4.63
ConocoPhillips 4.50
Schlumberger 4.48
Phillips 66 4.28
Kinder Morgan 3.91
Marathon Petroleum 3.71
Valero Energy 3.65
Occidental U 3.49


Index Sector Weightings %
Oil, Gas & Consumable Fuels 89.66
Energy Equipment & Services 10.34

http://www.direxion.com/products/direxion-daily-energy-bull-3x-etf

[pay streak]

You think wti will go that low? Was going to load erx but may wait a bit through these crazy times

[zsvq1p]

This might tell a story.
http://www.wtrg.com/rigs_graphs/short/rigus.gif

[zsvq1p]

Splitting and moving from 3X to 2X.

[zsvq1p]

I hope everyone was in ERY...

I’m flipping to ERX when WTI gets close to $10...


https://www.wsj.com/articles/overloaded-storage-facilities-likely-to-mean-even-lower-oil-prices-11584548816?emailToken=e16d0e03aee0e46baa27f92b66eb5444bNKPkNeDdgbAVJSoq0R74RIHkzGlD5/0nBc6rOe5P8PFfwc0nQEBInlAJTy9HOXkB2gjcq9XV2Vo8x1mvk8fboPNDlswBYvjhMbE8Bpm8Rn8pN8tzYq/7HayAFUkKv2A&reflink=article_copyURL_share

[zsvq1p]

Saudi Arabia floods markets with $25 oil as Russia fight escalates

https://www.reuters.com/article/us-oil-opec-saudi/saudi-arabia-floods-markets-with-25-oil-as-russia-fight-escalates-idUSKBN21022H

[zsvq1p]

Sorry to hear... Yesterday was the worst day since Black Monday... ANd this one makes it 3x's worse.

I took a beating but made some of it back going to ERY... I bailed on ERY too early last week or would have made most of it back.

I still say oil will recover once Saudi and Russia agree to hold back production. Right now, with the virus shutting down everything and this fight, they might think it's an opportunity to hurt the shale biz. So enter slowly... little by little... month by month... not anything your feelings cannot handle...

But wait until after the split. It seems the last time the split happened, it did not follow what one might think.

[bilyjak]

I'm out. RS will tear me a new Ars Whol. Took one hell of a beating. Wish I could retaliate against Direxion for the loss but nothing I can do.

[zsvq1p]

$20 oil possible as OPEC+ could unleash an extra 2.5 million barrels per day

https://www.oilandgasmiddleeast.com/drilling-production/36376-20-oil-possible-as-opec-could-unleash-an-extra-25-million-barrels-per-day

[yaboy520]

https://finance.yahoo.com/news/direxion-announces-reverse-splits-three-205000892.html?.tsrc=rss