Now that crude is once again crashing and burning I have been playing bounces down here below $45 by shorting the 3X Crude Bear fund (DWTI). The reason I short this fund is that if I am early or get caught a little off, eventually I will be right because the massive decay this fund experiences by the structure of the product (Bear funds lose increasingly more than bull funds due to the structure which causes massive tracking errors longer term, but most funds lose value monthly as they have to roll over to higher priced contracts - as the curve is generally in Contango). I am having a hard time at this point though taking any investment a step further to invest in any micro-cap oil, like ESTE - Earthstone. If oil stays this low for a longer period it could prove quite bad for these small players, even the ones with solid balance sheets like ESTE.
Senior Manager, Paul Saad and Associates, LLC