ETF Bull and Bear Discussion Board

[JohnCM]

I like the TNA idea.

35 - 55

[JohnCM]

GAMING AND ESPORTS

ESPO VanEck Vectors Video Gaming and eSports ETF YTD 24.36% $47.39

HERO Global X Video Games & Esports ETF
YTD 24.57% $20.40

BJK VanEck Vectors Gaming ETF
YTD -19.08% $33.78

NERD Roundhill BITKRAFT Esports & Digital Entertainment ETF YTD 12.33% $18.04

[JohnCM]

Yahoo Finance: Most Popular ETFs Since Market Bottom.

https://finance.yahoo.com/news/most-popular-etfs-since-market-191500928.html

[rmepilot]

Definitely an opportunity.

I'm not one to subscribe to the doom and gloom that's being pushed. Sadly, I feel it's becoming political, more than paying attention to the facts as they come out.

Pay more attention to what's going on around you and world wide, then plan your investments accordingly.

[maent]

Quite an interesting read. Very valid points made. Its indicating the world as we knew it in February is not coming back. Social isolation will become the norm. Sad, just very sad. But an opportunity in the least.

[JohnCM]

Cloud Computing ETFs to Gain on the New Normal Trends

By Sweta Jaiswal, FRM
Zacks
May 15, 2020

Cloud Computing ETFs to Gain on the New Normal Trends

The coronavirus pandemic continues to spread, having infected more than 4.3 million people globally, including at least 297,000 deaths. The outbreak has compelled people to stay indoors and work remotely. Also, the pandemic has resulted in some changes in lifestyle preferences. Even as the global economy starts to reopen in phases and social distancing restrictions are being eased, people will try to minimize the human-to-human contact. Twitter TWTR has said that its employees can keep working from home permanently if they wanted to. The company’s offices shall remain shut until at least September, except for some necessities. Meanwhile, the opening shall also be done with precautions. Other major tech firms, including Facebook FB and Alphabet GOOGL, have also extended their work from home policies through the end of the year.

In such a scenario, cloud computing’s popularity is growing and altering the way people are managing data, communication and business. Cloud computing and storage have empowered video conferencing, gaming, e-commerce shopping, remote project collaboration, online classes, editing, etc. It has also found applications in social networking, messaging apps and streaming services. Cloud computing is supporting organizations in remotely processing a lot of information, developing and running key applications and services, and helping employees across the world to work together.

In fact, going by a global CIO survey, around 79% of the polled groups aim to start using cloud technology in 2020. Moreover, per LearnBonds data, the global cloud IT infrastructure spending is projected at $69.2 billion for the ongoing year, up 3.6% year over year.

Latest Developments in Cloud Computing

Cloud computing is seeing increasing usage globally as it allows data interoperability in a scalable, cost-efficient way through data collection, processing, analyzing and sharing across platforms. Before the lockdown, companies were already discarding their own data centers to rent computing from Amazon AMZN, Microsoft MSFT and Google. However, this shift is expected to speed up now, as millions of employees are working remotely.

Microsoft recently informed about spending under $1.5 billion and about $1 billion for creating its first datacenter in Italy along with one in Poland, respectively. In February, the tech giant announced plans of opening a datacenter in Spain. Microsoft already has 60 cloud regions around the world. The company’s shift toward Internet-based computing, which includes products such as Office 365, Dynamic 365 and the flagship Azure computing platform, is paying off. Azure sales grew 59% in the fiscal third quarter, while sales of Office 365 Commercial and Dynamic 365 climbed 25% and 47%, respectively.

Another major player, Amazon recently opened a datacenter in Italy. Moreover, Amazon Web Services Inc. (AWS), division of Amazon, recently announced several major improvements in Amazon Macie like new features, greater availability worldwide and substantially reduced pricing. Per a report by Protocol, Apple AAPL, which already owns a huge cloud-based platform that includes iCloud, the App Store, Apple TV+, Apple Music, and many more, has “gone on a cloud computing hiring spree” over the last few months.

In the race, Oracle ORCL is ready to start its second cloud region in Chuncheon, South Korea, before the end of May. In this regard, the company said that “with the arrival of this second region, here in Korea, we look forward to helping more customers take advantage of this key resource locally.” In April, Zoom (ZM) collaborated with Oracle to expand its cloud business.

Cloud Computing ETFs to Shine

Here we highlight some ETFs that can gain from the growing demand for cloud computing as the coronavirus situation aggravates:

First Trust Cloud Computing ETF SKYY

The fund seeks investment results that correspond generally to the price and yield, before fees and expenses, of the ISE Cloud Computing Index. It tracks the performance of companies actively involved in the cloud computing industry. The fund holds about 65 securities in its basket, with Amazon, Microsoft, Oracle, and Google-parent Alphabet making to the top ten holdings. It has AUM of $3.56 billion and an expense ratio of 0.60%. The fund has gained around 5.5% in the year to date period (read: Twitter Promotes Permanent WFH: ETF Areas to Gain).

Global X Cloud Computing ETF CLOU

The fund seeks to invest in companies positioned to benefit from the increased adoption of cloud computing technology, including companies whose principal business is in offering computing Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), Infrastructure-as-a-Service (IaaS), managed server storage space and data-center real estate investment trusts, and/or cloud and edge computing infrastructure and hardware. The fund holds about 37 securities in its basket, having pure-play cloud companies like Zscaler (ZS) and Shopify (SHOP) holding positions in the top ten holdings. It has AUM of $584.8 million and an expense ratio of 0.68%. It has gained around 14.5% in the year to date period (read: ETFs to Gain From Lifestyle Changes Amid Coronavirus Crisis).

WisdomTree Cloud Computing ETF WCLD

The fund seeks to track the price and yield performance, before fees and expenses, of the BVP Nasdaq Emerging Cloud Index, an equally weighted Index designed to measure the performance of emerging public companies focused on delivering cloud-based software to customers. The fund holds about 53 securities in its basket, with Zoom, Cloudflare (NET) and Zscaler holding positions in the top ten holdings. It has AUM of $105.7 million and an expense ratio of 0.45%. It has gained around 21.5% in the year to date period.

[JohnCM]

TRIPLE BOTTOM!!

[maent]

Added more on the drop back today. Still don't see how this moves down despite WTI at $20

[JohnCM]

First, look at recent news releases from the fund's company in regards to NRGU.

[JohnCM]

NRGU.

[rmepilot]

I'm curious as well.

[JAMISON007]

What do you think of UGAZ? Any potential here?

[maent]

John, maybe you can explain the NRGU and ERX movement. WTI (and others) is in the shi*ter and it just goes up. I pulled my orders this morning looking at crude in freefall. SCO acted appropriately.

[maent]

Will USO be in play after the R/S tomorrow?

[starbuxsux]

I'm in USL..cost basis $10.15

[JohnCM]

UWTIF

RIP

[rmepilot]

I figured as much, but thanks for the good read. It was educational.

I put a little gambling $$ into DEAC, as they are merging with DK's. It's amazing how much $$ goes into sports betting.

[JohnCM]

No.

[JohnCM]

Not the 3 that I selected.

[rmepilot]

Ouch.

[JohnCM]

Yahoo Finance: Credit Suisse AG Announces That the Intraday Indicative Value of its VelocityShares™ 3x Long Crude Oil ETNs Was Equal to or Less Than Zero.

https://finance.yahoo.com/news/credit-suisse-ag-announces-intraday-191500211.html

[JohnCM]

Seeking Alpha: 2 Warnings From Crude Oil - ETF/ETN Products And Options Take Note.

https://seekingalpha.com/article/4339440-2-warnings-from-crude-oil-etf-etn-products-and-options-take-note

[maent]

Looking at the way shale companies are moving, USO IS in play... Correct?

[JohnCM]

I am starting to nibble. All three tickers were green.

[maent]

How we are not under $2 on NRGU doesn't add up.

[JohnCM]

CRUDE BOTTOM

NRGU 2.26 2.61
UCO 12.82 15.77
ERX 11.43 12.14
TOTAL 26.51 30.52

Last 3 weeks in May. That is when I will finish my buying.
Week of Apr 13th start small position
Week of Apr 20th continue total 1/6th
Week of Apr 28th at least 1/3 position
Week of May 4th major purchase 30%
Week of May 11th major purchase 30%
Week of May 18th finish purchase 6%

NRGU 3X 50% __________________________________________
UCO 2X 25% ____________________________________________
ERX 2X 25% _____________________________________________

2.5X

Conservatively WTI $15.00 to $25.00 Selling week of June 1st.

40% X 2.5X gives you a double (bagger).

[maent]

The problem with it is that they don't know how many shale companies will make it through this intact. It could be 2021-2022 before crude is back to levels that many shale companies will be able to be profitable. This could cripple shale output for 5 years. An eft or etn solely comprised of WTI shale companies, I wouldn't recommend either at this point.

[JohnCM]

Why is GUSH taking off?

Index Sector Weightings %

Oil & Gas Exploration & Production 76.77
Oil & Gas Refining & Marketing 16.30
Integrated Oil & Gas 6.93

Index Top Ten Holdings %

WPX Energy 2.80
Whiting Petroleum 2.76
Apache 2.66
EQT 2.60
Callon Petroleum 2.52
Range Resources 2.50
Concho Resources 2.47
Noble Energy 2.46
Eog Resources 2.46
Devon Energy 2.46

The S&P Oil & Gas Exploration & Production Select Industry Index (SPSIOPTR) is provided by Standard & Poor's Index Provider and includes domestic companies from the oil and gas exploration and production sub-industry. The Index is designed to measure the performance of a sub-industry or group of sub-industries determined based on the Global Industry Classification Standards (GICS).

A couple splits along the way.

[JohnCM]

Although I like the idea of a "pure play" as in USO, it is not a leveraged fund.

[JohnCM]

I am going to look into these in depth.

USO holds WTI monthly contracts.

West Texas Intermediate. Texas Light Sweet. This is the underlying commodity of New York Mercantile Exchange's oil futures contracts.

Fund Details

The United States Oil Fund® LP (USO) is an exchange-traded security designed to track the daily price movements of West Texas Intermediate ("WTI") light, sweet crude oil. USO issues shares that may be purchased and sold on the NYSE Arca.

The investment objective of USO is for the daily changes in percentage terms of its shares' NAV to reflect the daily changes in percentage terms of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the daily changes in price of USO's Benchmark Oil Futures Contract, less USO's expenses.

USO's Benchmark is the near month crude oil futures contract traded on the NYMEX. If the near month futures contract is within two weeks of expiration, the Benchmark will be the next month contract to expire. The crude oil contract is WTI light, sweet crude oil delivered to Cushing, Oklahoma.

USO invests primarily in listed crude oil futures contracts and other oil-related futures contracts, and may invest in forwards and swap contracts. These investments will be collateralized by cash, cash equivalents, and US government obligations with remaining maturities of two years or less.

USO's Fund Benefits

USO offers commodity exposure without using a commodity futures account.

USO provides features including, intra-day pricing, and market, limit, and stop orders.

USO provides portfolio holdings, market price, NAV and TNA on its website each day.

[maent]

From what I read on USO strategy, it looks as though they are specific to shale. This would be the reason I looked away from it. Its 52 week range is 2.31 -13.85. As of March 1st, its price was $10.00. I would expect it to get back to a March 1 level to call it a basic recovery. If you look at the others that you mentioned, the reward is not only higher, but it has the propensity to move faster. I don't know that I agree with UCO. Something doesn't look right. I haven't really looked into it, but at a glance it doesn't look like the "pot of gold" is as substantial as NRGU and ERX

"Our strategy

The investment seeks the daily changes in percentage terms of its shares’ per share net asset value (“NAV”) to reflect the daily changes in percentage terms of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the daily changes in the price of a specified short-term futures contract on light, sweet crude oil called the “Benchmark Oil Futures Contract,” less USO’s expenses. USO seeks to achieve its investment objective by investing primarily in futures contracts for light, sweet crude oil, other types of crude oil, diesel-heating oil, gasoline, natural gas, and other petroleum-based fuels."

[JohnCM]

Pure play on monthly Crude oil contracts.



US Oil Fund drops 30% after changing structure again as popular ETF tries to stave off collapse

PUBLISHED TUE, APR 21 2020
By Pippa Stevens
CNBC

The Untied States Oil Fund dropped 30% on Tuesday as managers made multiple changes to the fund’s structure in an effort to stave off additional losses.

The fund, which trades under the ticker USO and which is popular with retail investors, seeks to track the price of oil.

One change is that the fund will now invest in multiple futures contracts, rather than focusing on the contract for the nearest month.

The United States Oil Fund, a popular exchange-traded security known for its ‘USO’ ticker, plunged more than 30% on Tuesday as the fund’s managers made repeated changes to the fund’s structure in an effort to stave off additional losses. The fund, which is popular with retail investors, seeks to track the price of oil.

The latest change to USO’s terms came on Tuesday afternoon when the fund said it would invest in varying oil futures contracts. According to a regulatory filing, USO has already moved money into the oil contract for August delivery.

Originally, the fund’s structure called for it to buy futures in the nearest monthly contract, rolling to the next month’s contract two weeks before expiration. But amid the current meltdown in the oil market, which has seen prices drop to record lows, the fund was forced to change its structure in an effort to stem losses.

The first changes were made on Friday.

In afternoon trading USO pared some of its losses, trading roughly 22% lower at $2.93.

In addition to shifting which contracts the fund can hold, USCF, the manager of the fund, said on Tuesday that it was temporarily suspending the issuance of so-called creation baskets. Creation baskets are how an ETF creates new shares to meet demand. The baskets hold the underlying securities, which in this case are plummeting oil futures. With the halting of these creation baskets, the ETF will essentially now trade with a fixed number of shares like a closed-end mutual fund.

Last week USCF first changed the structure of the USO fund so that it could hold longer-dated contracts. A regulatory filing on Friday showed that the fund intended to have about 80% exposure to the front-month contract, with 20% in the second-month contract.

But as oil prices continue to fall off a cliff, on Tuesday the fund again altered how its holdings would be distributed across contracts, as well as which contracts it would own.

“Commencing on April 22, 2020, USO in response to ongoing extraordinary market conditions in the crude oil markets, including super contango, may invest ... in any month available or in varying percentages,” a regulatory filing said.

The filing showed that the fund currently has 40% of its portfolio in June contracts, 55% in July contracts, and 5% in August contracts.

USCF did not provide a comment.

John Davi, founder and CIO of Astoria Portfolio Advisors, said the new structures are being implemented in an effort to protect investors from plunging crude prices. The coronavirus pandemic continues to sap worldwide demand for crude, which has sent prices to their lowest levels on record.

According to Davi, the USO is primarily owned by retail investors, which can be dangerous for those who believe they are betting on oil prices moving higher over time, without fully understanding the dynamics in the commodity market.

“To buy USO you have to understand the oil futures market,” Davi told CNBC. “They [retail investors] just buy the ETF because they think the price of crude will go up, but they don’t understand the drivers, which are fairly complicated.”

On Monday, the May contract for oil fell to a negative price, an unprecedented event that wreaked havoc on the oil market. The contract expires today. USO likely had already sold that contract because it has stated in the past that it would invest in the next contract two weeks before expiration.

June futures began cratering on Tuesday, pressuring the fund. June futures expiring in a month dropped more than 40% on Tuesday. July contracts fell 26%. The May contract, however, recovered a bit and settled at $10.01 per barrel.

The rapid decline in the June and July contracts likely forced the fund to change structures yet again Tuesday afternoon.

Without the changes, the USO could run into trouble if those contracts also fall to a negative value as they near expiration, mimicking the May contract’s plunge ahead of its expiration.

Negative futures value is unprecedented and it is unclear how products like exchange-traded funds built for the retail investor to participate in the market will handle such events.

Yet by changing the structure of the fund, it may deviate from its stated purpose of tracking the future price of oil.

Hayman Capital Management CIO Kyle Bass has been warning investors about the danger of exchange traded funds that track oil prices.

“Retail has been plowing into these oil contracts thinking they’re buying spot crude oil when they’re buying the next front month. So they’re paying $22 a barrel when the spot market’s negative $38. Retail investors are going to get fleeced if they continue to fly into these oil ETFs,” he said Monday on CNBC’s “Closing Bell.”

[JohnCM]

I am actually lightening my exposure to NAIL and JETS.

SECTOR ETF AND ETN BEST TICKERS APRIL 2020

Transportation
JETS - Airlines
Real Estate
NAIL – Builders and Supplies $7.41 - $14.41 3,150,000 Vol (49%) XXX
DRN – Direxion Real Estate $6.60 - $11.11 1,100,000 Vol (40%)
Finance
FAS
DPST – Direxion Regional banks $4.63 - $7.74 1,760,000 Vol (+40%) XXX
Energy
CRUDE
BULL NRGU
Gold/Silver
CDE
USLV – Silver
GDX VanEck Vectors Gold miners $25.04 - $28.95 66,000,000 Vol (+14)
Entertainment
BJK – VanEck Vectors Gaming $24.39 - $29.01 55,000 Vol (+16%)
Travel
AWAY - ETFMG Travel $13.17 - $15.75 16,000 Vol (+16%)
Cannabis
MJ - $10.77 - $11.45 538,000 Vol (+6%)

[JohnCM]

Why are NRGU UCO ERX buys and USO is not.

US Oil Fund drops 30% after changing structure again as popular ETF tries to stave off collapse

PUBLISHED TUE, APR 21 2020
By Pippa Stevens
CNBC

The Untied States Oil Fund dropped 30% on Tuesday as managers made multiple changes to the fund’s structure in an effort to stave off additional losses.

The fund, which trades under the ticker USO and which is popular with retail investors, seeks to track the price of oil.

One change is that the fund will now invest in multiple futures contracts, rather than focusing on the contract for the nearest month.

The United States Oil Fund, a popular exchange-traded security known for its ‘USO’ ticker, plunged more than 30% on Tuesday as the fund’s managers made repeated changes to the fund’s structure in an effort to stave off additional losses. The fund, which is popular with retail investors, seeks to track the price of oil.

The latest change to USO’s terms came on Tuesday afternoon when the fund said it would invest in varying oil futures contracts. According to a regulatory filing, USO has already moved money into the oil contract for August delivery.

Originally, the fund’s structure called for it to buy futures in the nearest monthly contract, rolling to the next month’s contract two weeks before expiration. But amid the current meltdown in the oil market, which has seen prices drop to record lows, the fund was forced to change its structure in an effort to stem losses.

The first changes were made on Friday.

In afternoon trading USO pared some of its losses, trading roughly 22% lower at $2.93.

In addition to shifting which contracts the fund can hold, USCF, the manager of the fund, said on Tuesday that it was temporarily suspending the issuance of so-called creation baskets. Creation baskets are how an ETF creates new shares to meet demand. The baskets hold the underlying securities, which in this case are plummeting oil futures. With the halting of these creation baskets, the ETF will essentially now trade with a fixed number of shares like a closed-end mutual fund.

Last week USCF first changed the structure of the USO fund so that it could hold longer-dated contracts. A regulatory filing on Friday showed that the fund intended to have about 80% exposure to the front-month contract, with 20% in the second-month contract.

But as oil prices continue to fall off a cliff, on Tuesday the fund again altered how its holdings would be distributed across contracts, as well as which contracts it would own.

“Commencing on April 22, 2020, USO in response to ongoing extraordinary market conditions in the crude oil markets, including super contango, may invest ... in any month available or in varying percentages,” a regulatory filing said.

The filing showed that the fund currently has 40% of its portfolio in June contracts, 55% in July contracts, and 5% in August contracts.

USCF did not provide a comment.

John Davi, founder and CIO of Astoria Portfolio Advisors, said the new structures are being implemented in an effort to protect investors from plunging crude prices. The coronavirus pandemic continues to sap worldwide demand for crude, which has sent prices to their lowest levels on record.

According to Davi, the USO is primarily owned by retail investors, which can be dangerous for those who believe they are betting on oil prices moving higher over time, without fully understanding the dynamics in the commodity market.

“To buy USO you have to understand the oil futures market,” Davi told CNBC. “They [retail investors] just buy the ETF because they think the price of crude will go up, but they don’t understand the drivers, which are fairly complicated.”

On Monday, the May contract for oil fell to a negative price, an unprecedented event that wreaked havoc on the oil market. The contract expires today. USO likely had already sold that contract because it has stated in the past that it would invest in the next contract two weeks before expiration.

June futures began cratering on Tuesday, pressuring the fund. June futures expiring in a month dropped more than 40% on Tuesday. July contracts fell 26%. The May contract, however, recovered a bit and settled at $10.01 per barrel.

The rapid decline in the June and July contracts likely forced the fund to change structures yet again Tuesday afternoon.

Without the changes, the USO could run into trouble if those contracts also fall to a negative value as they near expiration, mimicking the May contract’s plunge ahead of its expiration.

Negative futures value is unprecedented and it is unclear how products like exchange-traded funds built for the retail investor to participate in the market will handle such events.

Yet by changing the structure of the fund, it may deviate from its stated purpose of tracking the future price of oil.

Hayman Capital Management CIO Kyle Bass has been warning investors about the danger of exchange traded funds that track oil prices.

“Retail has been plowing into these oil contracts thinking they’re buying spot crude oil when they’re buying the next front month. So they’re paying $22 a barrel when the spot market’s negative $38. Retail investors are going to get fleeced if they continue to fly into these oil ETFs,” he said Monday on CNBC’s “Closing Bell.”

Following Monday’s price action, Bass, who said he is short some energy-focused ETFs, tweeted that he would demand 100% collateral.

@Jkylebass
If May WTI Crude went negative -$40, and June WTI Crude is currently down $8 to $11 (on its way to negative), can US exchange listed oil ETFs go below Zero? If I were a major counterparty after yesterday’s session, I would demand more than 100% collateral. #USO #usoil

I guess the answer was 66% lower very quickly. https://t.co/X6xTEQtBvQ

— 🇺🇸 Kyle Bass 🇹🇼 (@Jkylebass) April 20, 2020

…

@Jkylebass
I guess the answer was 66% lower very quickly.

Here in TX (despite Trump’s plea to MBS), the storage facilities are full. Pipelines are full of crude and I was just told Cushing won’t take any more crude. What will the price of spot crude oil be when they literally can’t give it away? #OilPriceWar @JavierBlas

— 🇺🇸 Kyle Bass 🇹🇼 (@Jkylebass) April 2, 2020

…

2:49 AM - Apr 21, 2020
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Warren Pies, energy strategist at Ned Davis Research, sounded a similarly cautious tone.

“At best, they are expensive ways to gain programmatic futures exposure,” he said of commodity-based ETFs on Monday. “At worst, they are designed to implode. Still, money continues to flow into the USO ETF. As of last week, USO’s assets reached an all-time high of more than $5 billion. To reiterate: In this environment, USO is a train wreck. Stay away,” he said.

[maent]

Also watching NAIL. Its close to a bottom also. Might be a slightly longer term play, but the returns could be massive.

[maent]

I believe we will see a bottom on those by the end of the week. NRGU is very volatile. When it runs watch out. Like SCO did today! We have a very good opportunity to set up a nice cushion for retirement with the current state of the market. I plan to fully take advantage of it!

[JohnCM]

CRUDE

NRGU
2.26
UCO
12.82
ERX
11.43

TOTAL
26.51

[JohnCM]

ETF ETN not "buy and hold!"

I want to move "in and out."

My original thinking was a 14 day hold. Possibly a maximum 21 days towards the end of May.

BUT CRUDE is getting so crushed already, maybe I should look to nibble right now. I would start very slowly.

At it stands, my 3 tickers are

NRGU
UCO
ERX

[JohnCM]

We shall see. I have my alerts set.