3SOF

Ramsburg · October 17, 2008, 01:20:03 AM

Profile: The investment seeks to track the price and yield performance, before fees and expenses, 200% of the daily return of the Deutsche Bank Liquid Commodity index - Optimum Yield Oil Excess Return. The fund allows investors to take a leveraged view on the performance of crude oil. The index is a rules-based index composed of futures contracts on light sweet crude oil (WTI) and is intended to reflect the performance of crude oil.

This ETF replicates twice the daily performance of the Light Crude Futures.

Yesterday, Crude futures traded below 70$ a barrel for the first time since last year, I think this zone is a strong support and I expect a rebound with potential near $90/barrel short term.

Trading Plan:
Buy DXO today (10% exposure), we'll be setting a stop near yesterday's lows.

Ramsburg · October 20, 2008, 09:10:28 AM

Update:

Neutral developments in Crude for now, $70/barrel is still holding. I'm setting a suggested stop level.

Trading Plan:
Hold DXO with suggested stop near $5.65

Ramsburg · October 22, 2008, 01:01:57 PM

DXO Stopped @ $5.65

eggman11 · October 22, 2008, 02:21:58 PM

I actually just bought some today at an average price of $5.24. I think the $65 range for oil will be a bottom, I expect another OPEC cutback in the near future.

Ramsburg · October 22, 2008, 02:54:57 PM

I agree with you eggman, an OPEC cutback should be here anytime... But the $70 was broke, and that invalidates my technical overview in terms of timming for a rebound in Crude.
We'll keep this one under the radar, since the rebound target should remains near $90/barrel, no matter in what level the bottom is.

regards,

eggman11 · October 22, 2008, 05:37:11 PM

OPEC is meeting on Friday. They are expected to discuss a cut in the number of barrels per day.
The only question is how much will they cut?

eggman11 · October 23, 2008, 09:56:43 AM

Ramsburg,

I am bewildered. I bought DXO yesterday thinking oil prices will rebound. Right Now Oil is up 1.83% and DXO is down -(2.53%). Can you explain why there is such a big difference? It seems to be following market as opposed to the oil prices.

Thanks,

Eric

eggman11 · October 23, 2008, 11:06:17 AM

Quote from: eggman11 on October 23, 2008, 09:56:43 AM
Ramsburg,

I am bewildered. I bought DXO yesterday thinking oil prices will rebound. Right Now Oil is up 1.83% and DXO is down -(2.53%). Can you explain why there is such a big difference? It seems to be following market as opposed to the oil prices.

Thanks,

Eric

Now its doing the opposite oil is up 1.23% and DXO is up 7.00%. I have no clue what is going on? If anyone has any suggestions for why there is such a huge difference, I would greatly appreciate it.

Ramsburg · October 23, 2008, 11:12:31 AM

Hi eggman,

I think this is because DXO closes at 4PM, while Light Crude Futures keep trading. The tracking stays correct, but due to the different trading times it may look wrong.

eggman11 · October 27, 2008, 11:15:37 AM

Quote from: Ramsburg on October 23, 2008, 11:12:31 AM
Hi eggman,

I think this is because DXO closes at 4PM, while Light Crude Futures keep trading. The tracking stays correct, but due to the different trading times it may look wrong.

Shouldn't the correlation be the same if they are both open for trading at the same time. Oil was down 1.2% DXO was down 12%

AussieTrader · October 27, 2008, 11:35:12 AM

Hi Eggman,

Very high trading volatility can skew the correlation between the ETF and the underlying item it is tracking. Now I don't know about your specific situation with DXO and oil, but that can explain sometimes when an ETF does not move in the correlated (or inverse) direction / amount you would expect.
Another thing to look at is what exactly is DXO value based on. It uses the DB liquid commodity index and light sweet crude. So when you saw oil up or down whatever it was, were you looking at WTIC light sweet or maybe something else like CBOE oil or another oil tracking index. Just a thought, don't know if it helps.

eggman11 · October 27, 2008, 01:19:59 PM

Quote from: AussieTrader on October 27, 2008, 11:35:12 AM
Hi Eggman,

Very high trading volatility can skew the correlation between the ETF and the underlying item it is tracking. Now I don't know about your specific situation with DXO and oil, but that can explain sometimes when an ETF does not move in the correlated (or inverse) direction / amount you would expect.
Another thing to look at is what exactly is DXO value based on. It uses the DB liquid commodity index and light sweet crude. So when you saw oil up or down whatever it was, were you looking at WTIC light sweet or maybe something else like CBOE oil or another oil tracking index. Just a thought, don't know if it helps.

I was looking at WTIC

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