Leveraged Oil ETFs get rocked

Another Direxion oil ETF, known as the Direxion Daily S&P Oil & Gas Exp & Prod Bull 3X Shares (GUSH), got crushed Tuesday after oil prices retreated.

Members in Pinnacle’s monthly Stock Challenge have been working to take advantage of the leveraged nature of various ETFs in both the gold and oil sectors for years. On Tuesday, the power of leverage backfired on one member as Direxion oil ETF ‘GUSH’ led all decliners.

Direxion’s Daily S&P Oil & Gas Exp. & Prod. Bull and Bear 3x Shares are relatively new ETFs having been created on May 28th 2015.

Direxion Shares ETF Trust Direxion Daily S&P Oil & Gas Exp & Prod Bull falls Tuesday

Direxion Shares ETF Trust Direxion Daily S&P Oil & Gas Exp & Prod Bull 3x Shares lost 24% of its value Tuesday. This ETF has been on a rip since late-February. The ETF recently doubled in price, rising from a low of $2.47 on February 24th to a high of $5.45 yesterday. It closed 5 pennies off its low of $4.02 Tuesday. Now that, is volatility.

Below is an excerpt which provides an overview from the Direxion ETFs | Funds website:

“The Direxion Daily S&P Oil & Gas Exp. & Prod. Bull and Bear 3x Shares seek daily investment results, before fees and expenses, of 300% or 300% of the inverse (or opposite) of the performance of the S&P Oil & Gas Exploration & Production Select Industry Index.”

source: http://www.direxioninvestments.com/products/daily-sp-oil-gas-exp-prod-bu…

Canadian oil stocks fell Tuesday as investors took profits from a huge upward move Monday. Brad Carpenter at Cantor Fitzgerald wrote in a note to clients that:

“While market sentiment has improved over the past week, the fundamental oversupply picture for crude has not — and thus, we believes shorts might merely be waiting on the sidelines until the short squeeze and positive momentum wanes.”

source: http://www.marketwatch.com/story/oil-stocks-tumble-as-short-squeeze-fade…

High-Grade slips in March Stock Challenge

Long-time member and always competitive, past Stock Challenge Champ ‘High-Grade‘ selected GUSH for March’s Stock Challenge and saw his combined average return fall 19.28% Tuesday.

Despite the setback, High-Grade’s combined average return sat at 16.90% following the close Tuesday – enough for 28th overall.

Another long-time member and past Stock Challenge Champ ‘Rainendown‘ moved into 1st place Tuesday as his combined average return swelled to 70.83%.

Rainendown has been a member for nearly 7 years. There are 6 past Stock Challenge Champs in the Top 20 and 11 in the Top 50 so far.

View Top 20 Leaderboard

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