ERY is one of the long positions I have been putting together, there's a little room to add to it to bring it up to full position size, but I haven't made a decision there, but don't let that detract from the idea of ERY (3x bear energy) long or there are less leveraged ways to go about it such as short DBE (2x) or XLE short (1x).
Here's Energy as an industry group which includes not only oil, but services, transportation, basically everything related to energy, much different than just oil which does make up a large part of XLE.
XLE on a weekly chart shows a healthy trend as price moves up and volume moves up, these of course were the Bush/Cheney years, but hey, if our new president was a cattle farmer and head of the largest beef producing company in the world, I'd be buying in to cows. The red large volume around late 2009 is capitulation volume, you can see the trend since hasn't been nearly as healthy or strong, volume is way off, in fact it lines up pretty well on the advances with QE1 and 2 and tell me again Bernie how you have the best inflation fighting record in 60+ years of all the F_E_D chiefs, I remember clearly all the companies that were reporting and it was clear as day (as was ISM) that input costs were squeezing margins so hard they were laying off people to try to save money-so Bernie pulled a double whammy, but hey, the BANKS LOVED IT!
My DeMark-inspired Buy/Sell indicator, you saw it work exceptionally well with the VIX recently; in my experience, the larger the signal like we have now, the more powerful the signal.
My Trend Channel has stopped out, as I have said many times, after a stop out there's a lot of volatility and sometimes even new highs, but for the amount of volatility and the scraps you are fighting fot, you are almost ALWAYS better off just taking the meat of the trend's gains and leave the volatile scraps to someone else.
Note the weekly ATR at the bottom window was rising as it should with price late 2012, then fell to extreme lows, only about 1/3rd of the previous range, this is when the dumb money started pouring back in to the market, they kept volatility low, gains nice and steady, although small and as I said, it was a perfect environment for those who have been out of the market to get back in, the real question was, "Why did Wall St. go through all of that trouble to bring them back?" I think the answer is a pretty easy one.
Volatility has picked up a lot since we started moving toward the stop and just as I said would happen with the market, we see it in Energy, huge days up and down, but the asset is going no where, just churning at VERY BEST.
XLE and the daily MoneyStream (Don Worden's indicator, like 3C) with a huge negative divergence, note the positive at the lows of 2009.
XLE 2 hour with a leading negative divergence.
The same on the 30 min
As well as the 1 min.
ERX 3x Leveraged Energy Bull-should have similar signals as XLE
30 min chart leading negative
3 min leading negative...
ERY-3X Energy Bear The signals here should be the opposite-positive.
2 hour leading positive
3 min leading positive.
I like the area here, I think as the market moves down, ERY will still likely be in a decent position as a long position, I even like it here on a phased entry.
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