Commodities Essential - October 19, 2011

Alert: is the crude oil rally over? 

Let’s bet that it is by adding DTO now …


Crude oil is in a downtrend. Assuming it stays there, it looks to have little, if any, upside potential remaining. Based on the indicators I follow, crude oil’s appears overextended. The 100-day moving average is just overhead; the normal Fibonacci retracement levels have been achieved; and chart resistance at the September-high is in play.


On a broad risk-appetite note: it seems the short-term hope for a Eurozone crisis solution is fading … again, which could mean the next leg lower in all risk assets could begin soon.


Let’s place an order to add DTO (PowerShares Crude Oil Double Short ETN) as a play to capture a sustained decline in crude prices. 





Trade Essentials.



DTO (Last Price: $55.80)


Buy shares of PowerShares Crude Oil Double Short ETN, symbol DTO, at the market. Then place an order to SELL ALL your shares of PowerShares Crude Oil Double Short ETN, symbol DTO, at $49, STOP. This order is good till cancelled. 


[Please note this is a 2x-leveraged fund which means it will move roughly twice as fast as the underlying price of silver.]