$Direxion Daily S&P Oil & Gas Exp. & Prod. Bear 2X Shares (D...

Powdahound : @10baggerbamm

10baggerbamm Powdahound : it's not acting as it should. we've had oil at $58 this ETF should be 17 16 and you see where it is.
the two factors that are impacting are oil stocks are bought because they're part of indexes so when you have a reversal in the market like we're experiencing coming off of Lowe's they're Fortune 100 companies Fortune 500 companies they're part of the S&P index they are bought as part of these baskets of stocks so the oil companies are trading high or despite lackluster earnings earnings came out yet I listened to the CEOs they're really not optimistic because they're entering a point where the price of oil it's deteriorating their profit margins.
so you have the underlying stocks trading higher because they're part of indexes they're part of ETS as a result of this Market reversing and trading higher so that's impacting this ETF negatively number one
number two I listen to some of the CEOs after their earnings and what they're saying is President Trump wants to use oil and natural gas as part of these negotiation tactics he wants to secure the oil and natural gas industry in the United States and he wants to grow it on a global basis by having these nations purchase an agreed upon amount of oil and natural gas on a yearly basis from US. this has more to do with securing the Petro dollar as the standard of trade in oil globally then it really does have to do with increasing the profits to the oil companies and the natural gas companies. that being said it would increase the demand of oil and natural gas from us manufacturers and refineries so that's another reason why the underlying stocks despite rather lackluster earnings they are trading higher because of the anticipation of what might happen as part of these tariff negotiations.
so I think for these two reasons that's why this ETF is not acting rationally.
if you go back in time and look where oil was at 58 in the past relative to where this ETF was ETF was much higher and that's because we weren't coming out of a market bottom where the market sold off and we didn't have this anticipation of oil and natural gas being used as part of the negotiation process and tariff talks.
president Trump said give him a year oil is going to be down in the low 50s that only puts it $6 lower than where it was earlier this week... oil profits for these companies are going to decline I mean it just is logical if the commodity they produce is at a lower price their margins and profits fall so their stocks would have to come down the question is when???
so I think if you're patient there's money to be made here ... additionally if and when Russia and Ukraine ever have a peace deal that's going to put a lot of supply into the market that should be about $3 off the price of oil immediately because there's 170 vessels that are dry docked in Russia that have been sanctioned and I know part of their agreement for peace will permit Russia to be shipping oil around the world and selling it.. does ETF should trade back up into the mid-teens I just don't know when I'm not as optimistic now as I was last year that it was going to trade in the low 20s because we have new variables that were not part of the equation last year..

it's possible with oil up a buck and a half today this may trade at around $11 even I don't know what the weekend's going to bring but it might dip till like 10.80 it's still above the 250 day moving average and that's a long support line that's held up well.. if it dips this morning 50 cents I'll be a buyer I'm not going to go crazy  because of these variables that didn't exist even a month and a half ago..

Powdahound 10baggerbamm : @10baggerbamm Good to know. Thank you Sir

David Wang777 OP 10baggerbamm : Thank you again for sharing your opinion!

10baggerbamm David Wang777 OP : we're at $10.80 and I'm going to reestablish a small position.. like I said I'm not going to go crazy because right now you got money lifting the large oil drillers because they're being bought as part of the S&P 500 index funds money's flowing into those so everything rises.. and that obviously hurts this ETF because it requires those stocks to go down.. oil also is up about $2 this morning and that also is a negative for this ETF.
I think once these tariff issues are put to rest we're going to see Trump focus on drill baby drill because again oil prices fell on the fear of a global recession not because of production being increased so this was a technical reason initially that this ETF rally to $17 it wasn't fundamental because you didn't have an increase in supply as a result of drill baby drill you had a theoretical increase in supply because consumption would be reduced as a result of a global recession because of tariffs.
any level of effort got put so if you're in this already you're just going to have to be patient if you sold it the last time when I said I was selling it I think you can nibble down at this 1080 price I don't know if this is the bottom just so that we're clear because as tariffs maybe from the EU take effect and they're reduced for a 90 day pause or something similar we may drop down another 50 cents I don't know logic would say that could happen.. if you're going to establish a position again just use the $100,000 amount as your whole portfolio I'd want this ETF to be no more than 10% Max of your whole portfolio so I think you could buy a third of your position up to about a half of your position so $5,000 going in with the understanding that if we get subsequent deals in coming days that result in pauses you're probably going to have a similar reaction to oil and your system going to have a similar reaction to these oil stocks for money is going to flow into them blindly despite their profits being lower last quarter than what they anticipated.. so if for some reason this were to break and go into the $9 range you would have some dry powder where you could average your cost basis down
think you have to go back to what Trump said within one year oil's going to be in the low 50s.. when that happens this ETF is going to make another big run.. one of those catalyst is going to be Russia Ukraine war being put to rest because part of Putin's agreement I believe is going to be to let him begin selling oil on a global stage again and right now he has 170 ships tankers oil tankers that are dry docked when they start flowing oil around the world oil prices will drop that day about $3 and this ETF is going to have a huge Spike..
so this whole Trump trade with oil has been screwed up dramatically because of these terrorist issues but I believe ultimately we're basically where we started when Trump took office down in the 9 $10 range looking for a much higher price.. so I think if you're patient here it's a 6 to 12 month trade it basically has been reset all over again from a Time standpoint.. I think it's okay to nibble at this 10.80 point knowing that I might fall maybe another dollar and then you'll just deploy more cash and average your cost basis down...

ASteffie 10baggerbamm :

David Wang777 OP 10baggerbamm : Thank you sir, I just bought 5% of my portfolio at 9.83$. I sold all my positions at 15$ earlier

10baggerbamm David Wang777 OP : is it right now the market's buying everything with the S&P 500 doing well so oil companies are going up ultimately oil prices are going to come down oil company's profits will decline and this ETF will make another push it's just not happening the past couple of days it is what it is.. I'm back in it I didn't go crazy with my purchase and I'm not expecting a rally today because everything is about technology stocks. but there will be another rally and now it's just becomes a patient game and a waiting game

David Wang777 OP 10baggerbamm :