May 2008 Archives

DELL and MRVL are helping to lift the Nasdaq above its 200-day moving average this morning. Let's see if it can close above that important line...

On Today's Calendar:

• 9:45 -- Chicago PMI
• 10:00 -- Mich Sentiment-Rev.

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

We're starting to repeat what happened at the end of April when the dollar was rallying and gold dropping. The dollar made it back above its now upward-sloping 50-day moving average. Back on the 18th of this month I wrote about resistance for gold around 950. Well it didn't quite make it that far. Sellers stepped in around 935 and sent it back under its 50-day moving average. It'll be interesting to see if it takes out the May low or not.

Oil had some wild swings intraday thanks to the inventory report. It's cooling off some but it's certainly not broken.

I'm back to talking about 200-day moving averages again. Both the Russell 2000 and the Nasdaq traded above those moving averages intraday but sellers push them back beneath by the close. If the DELL news carries over we should see the Nasdaq gap over the 200 DMA in the morning.

A few changes today

The futures turned slightly negative after the 8:30 economic data. So were off to a choppy start but maybe the 10:30 oil inventories will give us some direction...

On Today's Calendar:

• 10:30 -- Crude Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The early strength gave way to a day of vacillating around unchanged. The indices ended the day up slightly on mildly higher volume. This looks and feels like just an oversold bounce that could peter out at any moment.

One change today

We've got some strength this morning. The futures were indicating a higher open earlier today and they got an extra boost from the 8:30 Durable Goods Report. Hopefully we'll get some more volume today...

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market was mixed for a good part of the morning but things picked up after noon, led by the Nasdaq. Oil pulling back a bit seems to have emboldened the bulls today. Judging by the light volume many people are still enjoying the holiday weekend.

The Nasdaq's looking pretty good after its textbook bounce off of the March trendline. But we can't sound the all-clear yet -- the 200-day moving average is just above.

The S&P still has a little work to do in order to break last week's downtrend like the Nasdaq did today.

Two changes today

On Today's Calendar:

• 10:00 -- New Home Sales
• 10:00 -- Consumer Confidence

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Selling resumed on Friday, especially in the larger cap NYSE stocks. It marked a bad end to a bad week for the bulls. But at least most of the indices are now short-term oversold.

Unlike the S&P 500, the Nasdaq closed well off of its lows. It was able to bounce off of its March trendline which happened to be a point above the May low. Let's see if those two support levels can continue to hold.

The S&P broke its May low and is closing in on its 50-day moving average. If that can't hold, 1,325 looks like the next support to me.

The Russell 2000 broke its March trendline but appears to have support just above 710, where the May lows and its 50 DMA are currently.

The Dow continued to lead the way down as it dove away from its 50-day moving average.

Just one change

One of the Fast Money guys mentioned the UltraShort Oil & Gas ProShares ETF (DUG) on yesterday's show. He questioned how that ETF, which is the double inverse of oil & gas could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index^SM

That "daily" part adds one complication to the picture. From the article 'Understanding ProShares' Long-Term Performance' on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).

A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than—or less than—what you’d expect over longer periods.

The article goes on to explain how & why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG -- the Dow Jones U.S. Oil & Gas Index^SM. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies." Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Below I've plotted oil vs. the index and Exxon Mobil over the last 12 months. (For ease of charting I'm going to use the United States Oil Fund ETF (USO) as a proxy for oil. USO may have its own issues but it tracks the actual price of oil close enough to make my point.)

This shows that the price of oil has seriously outperformed the index and Exxon Mobil. Here are the actual percentage changes for each:

• USO (oil) was up 113.2%
• the Dow Jones U.S. Oil & Gas Index^SM was up 24.5%
• Exxon Mobil was up 9.3%
• DUG was down 44.1%

Well at least USO and the Oil & Gas Index went in the same direction over the last 12 months. But on any given day, like today, they could trade opposite each other. And that means that DUG, on any given day, could trade with oil instead of opposite oil. I think many people would assume that if oil was down 5% DUG would be up 10%. That's clearly not a good assumption to make I'm seeing a lot of people talking about buying DUG to profit from a drop in oil prices. Given the performance data above I think they'd be better off shorting USO. (That is, if they can find shares of it to borrow -- I've had problems with that in the past.) Puts on USO may do the trick too.

Hopefully those who are trading DUG know that they're not playing the price of oil directly and won't be surprised on days like today when DUG and oil trade in the same direction. You've always got to know what comprises any ETF. I know that Google directs a lot of people to my list of inverse ETFs who are specifically searching for a way to short oil. Hopefully they do more research than just look at the name of the ETF and really find out what they're getting.

We had a respite from the selling yesterday but we're in for more today, at least at the open. Volume decreased yesterday and I expect the same today as the New Yorkers start heading for the Hamptons for the long weekend.

On Today's Calendar:

• 10:00 -- Existing Home Sales

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

DELL and MRVL are helping to lift the Nasdaq above its 200-day moving average this morning. Let's see if it can close above that important line...

On Today's Calendar:

• 9:45 -- Chicago PMI
• 10:00 -- Mich Sentiment-Rev.

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

We're starting to repeat what happened at the end of April when the dollar was rallying and gold dropping. The dollar made it back above its now upward-sloping 50-day moving average. Back on the 18th of this month I wrote about resistance for gold around 950. Well it didn't quite make it that far. Sellers stepped in around 935 and sent it back under its 50-day moving average. It'll be interesting to see if it takes out the May low or not.

Oil had some wild swings intraday thanks to the inventory report. It's cooling off some but it's certainly not broken.

I'm back to talking about 200-day moving averages again. Both the Russell 2000 and the Nasdaq traded above those moving averages intraday but sellers push them back beneath by the close. If the DELL news carries over we should see the Nasdaq gap over the 200 DMA in the morning.

A few changes today

The futures turned slightly negative after the 8:30 economic data. So were off to a choppy start but maybe the 10:30 oil inventories will give us some direction...

On Today's Calendar:

• 10:30 -- Crude Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The early strength gave way to a day of vacillating around unchanged. The indices ended the day up slightly on mildly higher volume. This looks and feels like just an oversold bounce that could peter out at any moment.

One change today

We've got some strength this morning. The futures were indicating a higher open earlier today and they got an extra boost from the 8:30 Durable Goods Report. Hopefully we'll get some more volume today...

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market was mixed for a good part of the morning but things picked up after noon, led by the Nasdaq. Oil pulling back a bit seems to have emboldened the bulls today. Judging by the light volume many people are still enjoying the holiday weekend.

The Nasdaq's looking pretty good after its textbook bounce off of the March trendline. But we can't sound the all-clear yet -- the 200-day moving average is just above.

The S&P still has a little work to do in order to break last week's downtrend like the Nasdaq did today.

Two changes today

On Today's Calendar:

• 10:00 -- New Home Sales
• 10:00 -- Consumer Confidence

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Selling resumed on Friday, especially in the larger cap NYSE stocks. It marked a bad end to a bad week for the bulls. But at least most of the indices are now short-term oversold.

Unlike the S&P 500, the Nasdaq closed well off of its lows. It was able to bounce off of its March trendline which happened to be a point above the May low. Let's see if those two support levels can continue to hold.

The S&P broke its May low and is closing in on its 50-day moving average. If that can't hold, 1,325 looks like the next support to me.

The Russell 2000 broke its March trendline but appears to have support just above 710, where the May lows and its 50 DMA are currently.

The Dow continued to lead the way down as it dove away from its 50-day moving average.

Just one change

One of the Fast Money guys mentioned the UltraShort Oil & Gas ProShares ETF (DUG) on yesterday's show. He questioned how that ETF, which is the double inverse of oil & gas could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index^SM

That "daily" part adds one complication to the picture. From the article 'Understanding ProShares' Long-Term Performance' on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).

A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than—or less than—what you’d expect over longer periods.

The article goes on to explain how & why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG -- the Dow Jones U.S. Oil & Gas Index^SM. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies." Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Below I've plotted oil vs. the index and Exxon Mobil over the last 12 months. (For ease of charting I'm going to use the United States Oil Fund ETF (USO) as a proxy for oil. USO may have its own issues but it tracks the actual price of oil close enough to make my point.)

This shows that the price of oil has seriously outperformed the index and Exxon Mobil. Here are the actual percentage changes for each:

• USO (oil) was up 113.2%
• the Dow Jones U.S. Oil & Gas Index^SM was up 24.5%
• Exxon Mobil was up 9.3%
• DUG was down 44.1%

Well at least USO and the Oil & Gas Index went in the same direction over the last 12 months. But on any given day, like today, they could trade opposite each other. And that means that DUG, on any given day, could trade with oil instead of opposite oil. I think many people would assume that if oil was down 5% DUG would be up 10%. That's clearly not a good assumption to make I'm seeing a lot of people talking about buying DUG to profit from a drop in oil prices. Given the performance data above I think they'd be better off shorting USO. (That is, if they can find shares of it to borrow -- I've had problems with that in the past.) Puts on USO may do the trick too.

Hopefully those who are trading DUG know that they're not playing the price of oil directly and won't be surprised on days like today when DUG and oil trade in the same direction. You've always got to know what comprises any ETF. I know that Google directs a lot of people to my list of inverse ETFs who are specifically searching for a way to short oil. Hopefully they do more research than just look at the name of the ETF and really find out what they're getting.

We had a respite from the selling yesterday but we're in for more today, at least at the open. Volume decreased yesterday and I expect the same today as the New Yorkers start heading for the Hamptons for the long weekend.

On Today's Calendar:

• 10:00 -- Existing Home Sales

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

DELL and MRVL are helping to lift the Nasdaq above its 200-day moving average this morning. Let's see if it can close above that important line...

On Today's Calendar:

• 9:45 -- Chicago PMI
• 10:00 -- Mich Sentiment-Rev.

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

We're starting to repeat what happened at the end of April when the dollar was rallying and gold dropping. The dollar made it back above its now upward-sloping 50-day moving average. Back on the 18th of this month I wrote about resistance for gold around 950. Well it didn't quite make it that far. Sellers stepped in around 935 and sent it back under its 50-day moving average. It'll be interesting to see if it takes out the May low or not.

Oil had some wild swings intraday thanks to the inventory report. It's cooling off some but it's certainly not broken.

I'm back to talking about 200-day moving averages again. Both the Russell 2000 and the Nasdaq traded above those moving averages intraday but sellers push them back beneath by the close. If the DELL news carries over we should see the Nasdaq gap over the 200 DMA in the morning.

A few changes today

The futures turned slightly negative after the 8:30 economic data. So were off to a choppy start but maybe the 10:30 oil inventories will give us some direction...

On Today's Calendar:

• 10:30 -- Crude Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The early strength gave way to a day of vacillating around unchanged. The indices ended the day up slightly on mildly higher volume. This looks and feels like just an oversold bounce that could peter out at any moment.

One change today

We've got some strength this morning. The futures were indicating a higher open earlier today and they got an extra boost from the 8:30 Durable Goods Report. Hopefully we'll get some more volume today...

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market was mixed for a good part of the morning but things picked up after noon, led by the Nasdaq. Oil pulling back a bit seems to have emboldened the bulls today. Judging by the light volume many people are still enjoying the holiday weekend.

The Nasdaq's looking pretty good after its textbook bounce off of the March trendline. But we can't sound the all-clear yet -- the 200-day moving average is just above.

The S&P still has a little work to do in order to break last week's downtrend like the Nasdaq did today.

Two changes today

On Today's Calendar:

• 10:00 -- New Home Sales
• 10:00 -- Consumer Confidence

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Selling resumed on Friday, especially in the larger cap NYSE stocks. It marked a bad end to a bad week for the bulls. But at least most of the indices are now short-term oversold.

Unlike the S&P 500, the Nasdaq closed well off of its lows. It was able to bounce off of its March trendline which happened to be a point above the May low. Let's see if those two support levels can continue to hold.

The S&P broke its May low and is closing in on its 50-day moving average. If that can't hold, 1,325 looks like the next support to me.

The Russell 2000 broke its March trendline but appears to have support just above 710, where the May lows and its 50 DMA are currently.

The Dow continued to lead the way down as it dove away from its 50-day moving average.

Just one change

One of the Fast Money guys mentioned the UltraShort Oil & Gas ProShares ETF (DUG) on yesterday's show. He questioned how that ETF, which is the double inverse of oil & gas could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index^SM

That "daily" part adds one complication to the picture. From the article 'Understanding ProShares' Long-Term Performance' on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).

A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than—or less than—what you’d expect over longer periods.

The article goes on to explain how & why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG -- the Dow Jones U.S. Oil & Gas Index^SM. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies." Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Below I've plotted oil vs. the index and Exxon Mobil over the last 12 months. (For ease of charting I'm going to use the United States Oil Fund ETF (USO) as a proxy for oil. USO may have its own issues but it tracks the actual price of oil close enough to make my point.)

This shows that the price of oil has seriously outperformed the index and Exxon Mobil. Here are the actual percentage changes for each:

• USO (oil) was up 113.2%
• the Dow Jones U.S. Oil & Gas Index^SM was up 24.5%
• Exxon Mobil was up 9.3%
• DUG was down 44.1%

Well at least USO and the Oil & Gas Index went in the same direction over the last 12 months. But on any given day, like today, they could trade opposite each other. And that means that DUG, on any given day, could trade with oil instead of opposite oil. I think many people would assume that if oil was down 5% DUG would be up 10%. That's clearly not a good assumption to make I'm seeing a lot of people talking about buying DUG to profit from a drop in oil prices. Given the performance data above I think they'd be better off shorting USO. (That is, if they can find shares of it to borrow -- I've had problems with that in the past.) Puts on USO may do the trick too.

Hopefully those who are trading DUG know that they're not playing the price of oil directly and won't be surprised on days like today when DUG and oil trade in the same direction. You've always got to know what comprises any ETF. I know that Google directs a lot of people to my list of inverse ETFs who are specifically searching for a way to short oil. Hopefully they do more research than just look at the name of the ETF and really find out what they're getting.

We had a respite from the selling yesterday but we're in for more today, at least at the open. Volume decreased yesterday and I expect the same today as the New Yorkers start heading for the Hamptons for the long weekend.

On Today's Calendar:

• 10:00 -- Existing Home Sales

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

DELL and MRVL are helping to lift the Nasdaq above its 200-day moving average this morning. Let's see if it can close above that important line...

On Today's Calendar:

• 9:45 -- Chicago PMI
• 10:00 -- Mich Sentiment-Rev.

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

We're starting to repeat what happened at the end of April when the dollar was rallying and gold dropping. The dollar made it back above its now upward-sloping 50-day moving average. Back on the 18th of this month I wrote about resistance for gold around 950. Well it didn't quite make it that far. Sellers stepped in around 935 and sent it back under its 50-day moving average. It'll be interesting to see if it takes out the May low or not.

Oil had some wild swings intraday thanks to the inventory report. It's cooling off some but it's certainly not broken.

I'm back to talking about 200-day moving averages again. Both the Russell 2000 and the Nasdaq traded above those moving averages intraday but sellers push them back beneath by the close. If the DELL news carries over we should see the Nasdaq gap over the 200 DMA in the morning.

A few changes today

The futures turned slightly negative after the 8:30 economic data. So were off to a choppy start but maybe the 10:30 oil inventories will give us some direction...

On Today's Calendar:

• 10:30 -- Crude Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The early strength gave way to a day of vacillating around unchanged. The indices ended the day up slightly on mildly higher volume. This looks and feels like just an oversold bounce that could peter out at any moment.

One change today

We've got some strength this morning. The futures were indicating a higher open earlier today and they got an extra boost from the 8:30 Durable Goods Report. Hopefully we'll get some more volume today...

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market was mixed for a good part of the morning but things picked up after noon, led by the Nasdaq. Oil pulling back a bit seems to have emboldened the bulls today. Judging by the light volume many people are still enjoying the holiday weekend.

The Nasdaq's looking pretty good after its textbook bounce off of the March trendline. But we can't sound the all-clear yet -- the 200-day moving average is just above.

The S&P still has a little work to do in order to break last week's downtrend like the Nasdaq did today.

Two changes today

On Today's Calendar:

• 10:00 -- New Home Sales
• 10:00 -- Consumer Confidence

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Selling resumed on Friday, especially in the larger cap NYSE stocks. It marked a bad end to a bad week for the bulls. But at least most of the indices are now short-term oversold.

Unlike the S&P 500, the Nasdaq closed well off of its lows. It was able to bounce off of its March trendline which happened to be a point above the May low. Let's see if those two support levels can continue to hold.

The S&P broke its May low and is closing in on its 50-day moving average. If that can't hold, 1,325 looks like the next support to me.

The Russell 2000 broke its March trendline but appears to have support just above 710, where the May lows and its 50 DMA are currently.

The Dow continued to lead the way down as it dove away from its 50-day moving average.

Just one change

One of the Fast Money guys mentioned the UltraShort Oil & Gas ProShares ETF (DUG) on yesterday's show. He questioned how that ETF, which is the double inverse of oil & gas could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index^SM

That "daily" part adds one complication to the picture. From the article 'Understanding ProShares' Long-Term Performance' on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).

A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than—or less than—what you’d expect over longer periods.

The article goes on to explain how & why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG -- the Dow Jones U.S. Oil & Gas Index^SM. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies." Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Below I've plotted oil vs. the index and Exxon Mobil over the last 12 months. (For ease of charting I'm going to use the United States Oil Fund ETF (USO) as a proxy for oil. USO may have its own issues but it tracks the actual price of oil close enough to make my point.)

This shows that the price of oil has seriously outperformed the index and Exxon Mobil. Here are the actual percentage changes for each:

• USO (oil) was up 113.2%
• the Dow Jones U.S. Oil & Gas Index^SM was up 24.5%
• Exxon Mobil was up 9.3%
• DUG was down 44.1%

Well at least USO and the Oil & Gas Index went in the same direction over the last 12 months. But on any given day, like today, they could trade opposite each other. And that means that DUG, on any given day, could trade with oil instead of opposite oil. I think many people would assume that if oil was down 5% DUG would be up 10%. That's clearly not a good assumption to make I'm seeing a lot of people talking about buying DUG to profit from a drop in oil prices. Given the performance data above I think they'd be better off shorting USO. (That is, if they can find shares of it to borrow -- I've had problems with that in the past.) Puts on USO may do the trick too.

Hopefully those who are trading DUG know that they're not playing the price of oil directly and won't be surprised on days like today when DUG and oil trade in the same direction. You've always got to know what comprises any ETF. I know that Google directs a lot of people to my list of inverse ETFs who are specifically searching for a way to short oil. Hopefully they do more research than just look at the name of the ETF and really find out what they're getting.

We had a respite from the selling yesterday but we're in for more today, at least at the open. Volume decreased yesterday and I expect the same today as the New Yorkers start heading for the Hamptons for the long weekend.

On Today's Calendar:

• 10:00 -- Existing Home Sales

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

DELL and MRVL are helping to lift the Nasdaq above its 200-day moving average this morning. Let's see if it can close above that important line...

On Today's Calendar:

• 9:45 -- Chicago PMI
• 10:00 -- Mich Sentiment-Rev.

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

We're starting to repeat what happened at the end of April when the dollar was rallying and gold dropping. The dollar made it back above its now upward-sloping 50-day moving average. Back on the 18th of this month I wrote about resistance for gold around 950. Well it didn't quite make it that far. Sellers stepped in around 935 and sent it back under its 50-day moving average. It'll be interesting to see if it takes out the May low or not.

Oil had some wild swings intraday thanks to the inventory report. It's cooling off some but it's certainly not broken.

I'm back to talking about 200-day moving averages again. Both the Russell 2000 and the Nasdaq traded above those moving averages intraday but sellers push them back beneath by the close. If the DELL news carries over we should see the Nasdaq gap over the 200 DMA in the morning.

A few changes today

The futures turned slightly negative after the 8:30 economic data. So were off to a choppy start but maybe the 10:30 oil inventories will give us some direction...

On Today's Calendar:

• 10:30 -- Crude Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The early strength gave way to a day of vacillating around unchanged. The indices ended the day up slightly on mildly higher volume. This looks and feels like just an oversold bounce that could peter out at any moment.

One change today

We've got some strength this morning. The futures were indicating a higher open earlier today and they got an extra boost from the 8:30 Durable Goods Report. Hopefully we'll get some more volume today...

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market was mixed for a good part of the morning but things picked up after noon, led by the Nasdaq. Oil pulling back a bit seems to have emboldened the bulls today. Judging by the light volume many people are still enjoying the holiday weekend.

The Nasdaq's looking pretty good after its textbook bounce off of the March trendline. But we can't sound the all-clear yet -- the 200-day moving average is just above.

The S&P still has a little work to do in order to break last week's downtrend like the Nasdaq did today.

Two changes today

On Today's Calendar:

• 10:00 -- New Home Sales
• 10:00 -- Consumer Confidence

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Selling resumed on Friday, especially in the larger cap NYSE stocks. It marked a bad end to a bad week for the bulls. But at least most of the indices are now short-term oversold.

Unlike the S&P 500, the Nasdaq closed well off of its lows. It was able to bounce off of its March trendline which happened to be a point above the May low. Let's see if those two support levels can continue to hold.

The S&P broke its May low and is closing in on its 50-day moving average. If that can't hold, 1,325 looks like the next support to me.

The Russell 2000 broke its March trendline but appears to have support just above 710, where the May lows and its 50 DMA are currently.

The Dow continued to lead the way down as it dove away from its 50-day moving average.

Just one change

One of the Fast Money guys mentioned the UltraShort Oil & Gas ProShares ETF (DUG) on yesterday's show. He questioned how that ETF, which is the double inverse of oil & gas could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index^SM

That "daily" part adds one complication to the picture. From the article 'Understanding ProShares' Long-Term Performance' on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).

A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than—or less than—what you’d expect over longer periods.

The article goes on to explain how & why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG -- the Dow Jones U.S. Oil & Gas Index^SM. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies." Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Below I've plotted oil vs. the index and Exxon Mobil over the last 12 months. (For ease of charting I'm going to use the United States Oil Fund ETF (USO) as a proxy for oil. USO may have its own issues but it tracks the actual price of oil close enough to make my point.)

This shows that the price of oil has seriously outperformed the index and Exxon Mobil. Here are the actual percentage changes for each:

• USO (oil) was up 113.2%
• the Dow Jones U.S. Oil & Gas Index^SM was up 24.5%
• Exxon Mobil was up 9.3%
• DUG was down 44.1%

Well at least USO and the Oil & Gas Index went in the same direction over the last 12 months. But on any given day, like today, they could trade opposite each other. And that means that DUG, on any given day, could trade with oil instead of opposite oil. I think many people would assume that if oil was down 5% DUG would be up 10%. That's clearly not a good assumption to make I'm seeing a lot of people talking about buying DUG to profit from a drop in oil prices. Given the performance data above I think they'd be better off shorting USO. (That is, if they can find shares of it to borrow -- I've had problems with that in the past.) Puts on USO may do the trick too.

Hopefully those who are trading DUG know that they're not playing the price of oil directly and won't be surprised on days like today when DUG and oil trade in the same direction. You've always got to know what comprises any ETF. I know that Google directs a lot of people to my list of inverse ETFs who are specifically searching for a way to short oil. Hopefully they do more research than just look at the name of the ETF and really find out what they're getting.

We had a respite from the selling yesterday but we're in for more today, at least at the open. Volume decreased yesterday and I expect the same today as the New Yorkers start heading for the Hamptons for the long weekend.

On Today's Calendar:

• 10:00 -- Existing Home Sales

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

DELL and MRVL are helping to lift the Nasdaq above its 200-day moving average this morning. Let's see if it can close above that important line...

On Today's Calendar:

• 9:45 -- Chicago PMI
• 10:00 -- Mich Sentiment-Rev.

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

We're starting to repeat what happened at the end of April when the dollar was rallying and gold dropping. The dollar made it back above its now upward-sloping 50-day moving average. Back on the 18th of this month I wrote about resistance for gold around 950. Well it didn't quite make it that far. Sellers stepped in around 935 and sent it back under its 50-day moving average. It'll be interesting to see if it takes out the May low or not.

Oil had some wild swings intraday thanks to the inventory report. It's cooling off some but it's certainly not broken.

I'm back to talking about 200-day moving averages again. Both the Russell 2000 and the Nasdaq traded above those moving averages intraday but sellers push them back beneath by the close. If the DELL news carries over we should see the Nasdaq gap over the 200 DMA in the morning.

A few changes today

The futures turned slightly negative after the 8:30 economic data. So were off to a choppy start but maybe the 10:30 oil inventories will give us some direction...

On Today's Calendar:

• 10:30 -- Crude Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The early strength gave way to a day of vacillating around unchanged. The indices ended the day up slightly on mildly higher volume. This looks and feels like just an oversold bounce that could peter out at any moment.

One change today

We've got some strength this morning. The futures were indicating a higher open earlier today and they got an extra boost from the 8:30 Durable Goods Report. Hopefully we'll get some more volume today...

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market was mixed for a good part of the morning but things picked up after noon, led by the Nasdaq. Oil pulling back a bit seems to have emboldened the bulls today. Judging by the light volume many people are still enjoying the holiday weekend.

The Nasdaq's looking pretty good after its textbook bounce off of the March trendline. But we can't sound the all-clear yet -- the 200-day moving average is just above.

The S&P still has a little work to do in order to break last week's downtrend like the Nasdaq did today.

Two changes today

On Today's Calendar:

• 10:00 -- New Home Sales
• 10:00 -- Consumer Confidence

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Selling resumed on Friday, especially in the larger cap NYSE stocks. It marked a bad end to a bad week for the bulls. But at least most of the indices are now short-term oversold.

Unlike the S&P 500, the Nasdaq closed well off of its lows. It was able to bounce off of its March trendline which happened to be a point above the May low. Let's see if those two support levels can continue to hold.

The S&P broke its May low and is closing in on its 50-day moving average. If that can't hold, 1,325 looks like the next support to me.

The Russell 2000 broke its March trendline but appears to have support just above 710, where the May lows and its 50 DMA are currently.

The Dow continued to lead the way down as it dove away from its 50-day moving average.

Just one change

One of the Fast Money guys mentioned the UltraShort Oil & Gas ProShares ETF (DUG) on yesterday's show. He questioned how that ETF, which is the double inverse of oil & gas could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index^SM

That "daily" part adds one complication to the picture. From the article 'Understanding ProShares' Long-Term Performance' on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).

A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than—or less than—what you’d expect over longer periods.

The article goes on to explain how & why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG -- the Dow Jones U.S. Oil & Gas Index^SM. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies." Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Below I've plotted oil vs. the index and Exxon Mobil over the last 12 months. (For ease of charting I'm going to use the United States Oil Fund ETF (USO) as a proxy for oil. USO may have its own issues but it tracks the actual price of oil close enough to make my point.)

This shows that the price of oil has seriously outperformed the index and Exxon Mobil. Here are the actual percentage changes for each:

• USO (oil) was up 113.2%
• the Dow Jones U.S. Oil & Gas Index^SM was up 24.5%
• Exxon Mobil was up 9.3%
• DUG was down 44.1%

Well at least USO and the Oil & Gas Index went in the same direction over the last 12 months. But on any given day, like today, they could trade opposite each other. And that means that DUG, on any given day, could trade with oil instead of opposite oil. I think many people would assume that if oil was down 5% DUG would be up 10%. That's clearly not a good assumption to make I'm seeing a lot of people talking about buying DUG to profit from a drop in oil prices. Given the performance data above I think they'd be better off shorting USO. (That is, if they can find shares of it to borrow -- I've had problems with that in the past.) Puts on USO may do the trick too.

Hopefully those who are trading DUG know that they're not playing the price of oil directly and won't be surprised on days like today when DUG and oil trade in the same direction. You've always got to know what comprises any ETF. I know that Google directs a lot of people to my list of inverse ETFs who are specifically searching for a way to short oil. Hopefully they do more research than just look at the name of the ETF and really find out what they're getting.

We had a respite from the selling yesterday but we're in for more today, at least at the open. Volume decreased yesterday and I expect the same today as the New Yorkers start heading for the Hamptons for the long weekend.

On Today's Calendar:

• 10:00 -- Existing Home Sales

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

DELL and MRVL are helping to lift the Nasdaq above its 200-day moving average this morning. Let's see if it can close above that important line...

On Today's Calendar:

• 9:45 -- Chicago PMI
• 10:00 -- Mich Sentiment-Rev.

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

We're starting to repeat what happened at the end of April when the dollar was rallying and gold dropping. The dollar made it back above its now upward-sloping 50-day moving average. Back on the 18th of this month I wrote about resistance for gold around 950. Well it didn't quite make it that far. Sellers stepped in around 935 and sent it back under its 50-day moving average. It'll be interesting to see if it takes out the May low or not.

Oil had some wild swings intraday thanks to the inventory report. It's cooling off some but it's certainly not broken.

I'm back to talking about 200-day moving averages again. Both the Russell 2000 and the Nasdaq traded above those moving averages intraday but sellers push them back beneath by the close. If the DELL news carries over we should see the Nasdaq gap over the 200 DMA in the morning.

A few changes today

The futures turned slightly negative after the 8:30 economic data. So were off to a choppy start but maybe the 10:30 oil inventories will give us some direction...

On Today's Calendar:

• 10:30 -- Crude Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The early strength gave way to a day of vacillating around unchanged. The indices ended the day up slightly on mildly higher volume. This looks and feels like just an oversold bounce that could peter out at any moment.

One change today

We've got some strength this morning. The futures were indicating a higher open earlier today and they got an extra boost from the 8:30 Durable Goods Report. Hopefully we'll get some more volume today...

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market was mixed for a good part of the morning but things picked up after noon, led by the Nasdaq. Oil pulling back a bit seems to have emboldened the bulls today. Judging by the light volume many people are still enjoying the holiday weekend.

The Nasdaq's looking pretty good after its textbook bounce off of the March trendline. But we can't sound the all-clear yet -- the 200-day moving average is just above.

The S&P still has a little work to do in order to break last week's downtrend like the Nasdaq did today.

Two changes today

On Today's Calendar:

• 10:00 -- New Home Sales
• 10:00 -- Consumer Confidence

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Selling resumed on Friday, especially in the larger cap NYSE stocks. It marked a bad end to a bad week for the bulls. But at least most of the indices are now short-term oversold.

Unlike the S&P 500, the Nasdaq closed well off of its lows. It was able to bounce off of its March trendline which happened to be a point above the May low. Let's see if those two support levels can continue to hold.

The S&P broke its May low and is closing in on its 50-day moving average. If that can't hold, 1,325 looks like the next support to me.

The Russell 2000 broke its March trendline but appears to have support just above 710, where the May lows and its 50 DMA are currently.

The Dow continued to lead the way down as it dove away from its 50-day moving average.

Just one change

One of the Fast Money guys mentioned the UltraShort Oil & Gas ProShares ETF (DUG) on yesterday's show. He questioned how that ETF, which is the double inverse of oil & gas could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index^SM

That "daily" part adds one complication to the picture. From the article 'Understanding ProShares' Long-Term Performance' on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).

A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than—or less than—what you’d expect over longer periods.

The article goes on to explain how & why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG -- the Dow Jones U.S. Oil & Gas Index^SM. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies." Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Below I've plotted oil vs. the index and Exxon Mobil over the last 12 months. (For ease of charting I'm going to use the United States Oil Fund ETF (USO) as a proxy for oil. USO may have its own issues but it tracks the actual price of oil close enough to make my point.)

This shows that the price of oil has seriously outperformed the index and Exxon Mobil. Here are the actual percentage changes for each:

• USO (oil) was up 113.2%
• the Dow Jones U.S. Oil & Gas Index^SM was up 24.5%
• Exxon Mobil was up 9.3%
• DUG was down 44.1%

Well at least USO and the Oil & Gas Index went in the same direction over the last 12 months. But on any given day, like today, they could trade opposite each other. And that means that DUG, on any given day, could trade with oil instead of opposite oil. I think many people would assume that if oil was down 5% DUG would be up 10%. That's clearly not a good assumption to make I'm seeing a lot of people talking about buying DUG to profit from a drop in oil prices. Given the performance data above I think they'd be better off shorting USO. (That is, if they can find shares of it to borrow -- I've had problems with that in the past.) Puts on USO may do the trick too.

Hopefully those who are trading DUG know that they're not playing the price of oil directly and won't be surprised on days like today when DUG and oil trade in the same direction. You've always got to know what comprises any ETF. I know that Google directs a lot of people to my list of inverse ETFs who are specifically searching for a way to short oil. Hopefully they do more research than just look at the name of the ETF and really find out what they're getting.

We had a respite from the selling yesterday but we're in for more today, at least at the open. Volume decreased yesterday and I expect the same today as the New Yorkers start heading for the Hamptons for the long weekend.

On Today's Calendar:

• 10:00 -- Existing Home Sales

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

DELL and MRVL are helping to lift the Nasdaq above its 200-day moving average this morning. Let's see if it can close above that important line...

On Today's Calendar:

• 9:45 -- Chicago PMI
• 10:00 -- Mich Sentiment-Rev.

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

We're starting to repeat what happened at the end of April when the dollar was rallying and gold dropping. The dollar made it back above its now upward-sloping 50-day moving average. Back on the 18th of this month I wrote about resistance for gold around 950. Well it didn't quite make it that far. Sellers stepped in around 935 and sent it back under its 50-day moving average. It'll be interesting to see if it takes out the May low or not.

Oil had some wild swings intraday thanks to the inventory report. It's cooling off some but it's certainly not broken.

I'm back to talking about 200-day moving averages again. Both the Russell 2000 and the Nasdaq traded above those moving averages intraday but sellers push them back beneath by the close. If the DELL news carries over we should see the Nasdaq gap over the 200 DMA in the morning.

A few changes today

The futures turned slightly negative after the 8:30 economic data. So were off to a choppy start but maybe the 10:30 oil inventories will give us some direction...

On Today's Calendar:

• 10:30 -- Crude Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The early strength gave way to a day of vacillating around unchanged. The indices ended the day up slightly on mildly higher volume. This looks and feels like just an oversold bounce that could peter out at any moment.

One change today

We've got some strength this morning. The futures were indicating a higher open earlier today and they got an extra boost from the 8:30 Durable Goods Report. Hopefully we'll get some more volume today...

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market was mixed for a good part of the morning but things picked up after noon, led by the Nasdaq. Oil pulling back a bit seems to have emboldened the bulls today. Judging by the light volume many people are still enjoying the holiday weekend.

The Nasdaq's looking pretty good after its textbook bounce off of the March trendline. But we can't sound the all-clear yet -- the 200-day moving average is just above.

The S&P still has a little work to do in order to break last week's downtrend like the Nasdaq did today.

Two changes today

On Today's Calendar:

• 10:00 -- New Home Sales
• 10:00 -- Consumer Confidence

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Selling resumed on Friday, especially in the larger cap NYSE stocks. It marked a bad end to a bad week for the bulls. But at least most of the indices are now short-term oversold.

Unlike the S&P 500, the Nasdaq closed well off of its lows. It was able to bounce off of its March trendline which happened to be a point above the May low. Let's see if those two support levels can continue to hold.

The S&P broke its May low and is closing in on its 50-day moving average. If that can't hold, 1,325 looks like the next support to me.

The Russell 2000 broke its March trendline but appears to have support just above 710, where the May lows and its 50 DMA are currently.

The Dow continued to lead the way down as it dove away from its 50-day moving average.

Just one change

One of the Fast Money guys mentioned the UltraShort Oil & Gas ProShares ETF (DUG) on yesterday's show. He questioned how that ETF, which is the double inverse of oil & gas could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index^SM

That "daily" part adds one complication to the picture. From the article 'Understanding ProShares' Long-Term Performance' on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).

A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than—or less than—what you’d expect over longer periods.

The article goes on to explain how & why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG -- the Dow Jones U.S. Oil & Gas Index^SM. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies." Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Below I've plotted oil vs. the index and Exxon Mobil over the last 12 months. (For ease of charting I'm going to use the United States Oil Fund ETF (USO) as a proxy for oil. USO may have its own issues but it tracks the actual price of oil close enough to make my point.)

This shows that the price of oil has seriously outperformed the index and Exxon Mobil. Here are the actual percentage changes for each:

• USO (oil) was up 113.2%
• the Dow Jones U.S. Oil & Gas Index^SM was up 24.5%
• Exxon Mobil was up 9.3%
• DUG was down 44.1%

Well at least USO and the Oil & Gas Index went in the same direction over the last 12 months. But on any given day, like today, they could trade opposite each other. And that means that DUG, on any given day, could trade with oil instead of opposite oil. I think many people would assume that if oil was down 5% DUG would be up 10%. That's clearly not a good assumption to make I'm seeing a lot of people talking about buying DUG to profit from a drop in oil prices. Given the performance data above I think they'd be better off shorting USO. (That is, if they can find shares of it to borrow -- I've had problems with that in the past.) Puts on USO may do the trick too.

Hopefully those who are trading DUG know that they're not playing the price of oil directly and won't be surprised on days like today when DUG and oil trade in the same direction. You've always got to know what comprises any ETF. I know that Google directs a lot of people to my list of inverse ETFs who are specifically searching for a way to short oil. Hopefully they do more research than just look at the name of the ETF and really find out what they're getting.

We had a respite from the selling yesterday but we're in for more today, at least at the open. Volume decreased yesterday and I expect the same today as the New Yorkers start heading for the Hamptons for the long weekend.

On Today's Calendar:

• 10:00 -- Existing Home Sales

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

DELL and MRVL are helping to lift the Nasdaq above its 200-day moving average this morning. Let's see if it can close above that important line...

On Today's Calendar:

• 9:45 -- Chicago PMI
• 10:00 -- Mich Sentiment-Rev.

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

We're starting to repeat what happened at the end of April when the dollar was rallying and gold dropping. The dollar made it back above its now upward-sloping 50-day moving average. Back on the 18th of this month I wrote about resistance for gold around 950. Well it didn't quite make it that far. Sellers stepped in around 935 and sent it back under its 50-day moving average. It'll be interesting to see if it takes out the May low or not.

Oil had some wild swings intraday thanks to the inventory report. It's cooling off some but it's certainly not broken.

I'm back to talking about 200-day moving averages again. Both the Russell 2000 and the Nasdaq traded above those moving averages intraday but sellers push them back beneath by the close. If the DELL news carries over we should see the Nasdaq gap over the 200 DMA in the morning.

A few changes today

The futures turned slightly negative after the 8:30 economic data. So were off to a choppy start but maybe the 10:30 oil inventories will give us some direction...

On Today's Calendar:

• 10:30 -- Crude Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The early strength gave way to a day of vacillating around unchanged. The indices ended the day up slightly on mildly higher volume. This looks and feels like just an oversold bounce that could peter out at any moment.

One change today

We've got some strength this morning. The futures were indicating a higher open earlier today and they got an extra boost from the 8:30 Durable Goods Report. Hopefully we'll get some more volume today...

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market was mixed for a good part of the morning but things picked up after noon, led by the Nasdaq. Oil pulling back a bit seems to have emboldened the bulls today. Judging by the light volume many people are still enjoying the holiday weekend.

The Nasdaq's looking pretty good after its textbook bounce off of the March trendline. But we can't sound the all-clear yet -- the 200-day moving average is just above.

The S&P still has a little work to do in order to break last week's downtrend like the Nasdaq did today.

Two changes today

On Today's Calendar:

• 10:00 -- New Home Sales
• 10:00 -- Consumer Confidence

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Selling resumed on Friday, especially in the larger cap NYSE stocks. It marked a bad end to a bad week for the bulls. But at least most of the indices are now short-term oversold.

Unlike the S&P 500, the Nasdaq closed well off of its lows. It was able to bounce off of its March trendline which happened to be a point above the May low. Let's see if those two support levels can continue to hold.

The S&P broke its May low and is closing in on its 50-day moving average. If that can't hold, 1,325 looks like the next support to me.

The Russell 2000 broke its March trendline but appears to have support just above 710, where the May lows and its 50 DMA are currently.

The Dow continued to lead the way down as it dove away from its 50-day moving average.

Just one change

One of the Fast Money guys mentioned the UltraShort Oil & Gas ProShares ETF (DUG) on yesterday's show. He questioned how that ETF, which is the double inverse of oil & gas could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index^SM

That "daily" part adds one complication to the picture. From the article 'Understanding ProShares' Long-Term Performance' on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).

A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than—or less than—what you’d expect over longer periods.

The article goes on to explain how & why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG -- the Dow Jones U.S. Oil & Gas Index^SM. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies." Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Below I've plotted oil vs. the index and Exxon Mobil over the last 12 months. (For ease of charting I'm going to use the United States Oil Fund ETF (USO) as a proxy for oil. USO may have its own issues but it tracks the actual price of oil close enough to make my point.)

This shows that the price of oil has seriously outperformed the index and Exxon Mobil. Here are the actual percentage changes for each:

• USO (oil) was up 113.2%
• the Dow Jones U.S. Oil & Gas Index^SM was up 24.5%
• Exxon Mobil was up 9.3%
• DUG was down 44.1%

Well at least USO and the Oil & Gas Index went in the same direction over the last 12 months. But on any given day, like today, they could trade opposite each other. And that means that DUG, on any given day, could trade with oil instead of opposite oil. I think many people would assume that if oil was down 5% DUG would be up 10%. That's clearly not a good assumption to make I'm seeing a lot of people talking about buying DUG to profit from a drop in oil prices. Given the performance data above I think they'd be better off shorting USO. (That is, if they can find shares of it to borrow -- I've had problems with that in the past.) Puts on USO may do the trick too.

Hopefully those who are trading DUG know that they're not playing the price of oil directly and won't be surprised on days like today when DUG and oil trade in the same direction. You've always got to know what comprises any ETF. I know that Google directs a lot of people to my list of inverse ETFs who are specifically searching for a way to short oil. Hopefully they do more research than just look at the name of the ETF and really find out what they're getting.

We had a respite from the selling yesterday but we're in for more today, at least at the open. Volume decreased yesterday and I expect the same today as the New Yorkers start heading for the Hamptons for the long weekend.

On Today's Calendar:

• 10:00 -- Existing Home Sales

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

DELL and MRVL are helping to lift the Nasdaq above its 200-day moving average this morning. Let's see if it can close above that important line...

On Today's Calendar:

• 9:45 -- Chicago PMI
• 10:00 -- Mich Sentiment-Rev.

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

We're starting to repeat what happened at the end of April when the dollar was rallying and gold dropping. The dollar made it back above its now upward-sloping 50-day moving average. Back on the 18th of this month I wrote about resistance for gold around 950. Well it didn't quite make it that far. Sellers stepped in around 935 and sent it back under its 50-day moving average. It'll be interesting to see if it takes out the May low or not.

Oil had some wild swings intraday thanks to the inventory report. It's cooling off some but it's certainly not broken.

I'm back to talking about 200-day moving averages again. Both the Russell 2000 and the Nasdaq traded above those moving averages intraday but sellers push them back beneath by the close. If the DELL news carries over we should see the Nasdaq gap over the 200 DMA in the morning.

A few changes today

The futures turned slightly negative after the 8:30 economic data. So were off to a choppy start but maybe the 10:30 oil inventories will give us some direction...

On Today's Calendar:

• 10:30 -- Crude Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The early strength gave way to a day of vacillating around unchanged. The indices ended the day up slightly on mildly higher volume. This looks and feels like just an oversold bounce that could peter out at any moment.

One change today

We've got some strength this morning. The futures were indicating a higher open earlier today and they got an extra boost from the 8:30 Durable Goods Report. Hopefully we'll get some more volume today...

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market was mixed for a good part of the morning but things picked up after noon, led by the Nasdaq. Oil pulling back a bit seems to have emboldened the bulls today. Judging by the light volume many people are still enjoying the holiday weekend.

The Nasdaq's looking pretty good after its textbook bounce off of the March trendline. But we can't sound the all-clear yet -- the 200-day moving average is just above.

The S&P still has a little work to do in order to break last week's downtrend like the Nasdaq did today.

Two changes today

On Today's Calendar:

• 10:00 -- New Home Sales
• 10:00 -- Consumer Confidence

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Selling resumed on Friday, especially in the larger cap NYSE stocks. It marked a bad end to a bad week for the bulls. But at least most of the indices are now short-term oversold.

Unlike the S&P 500, the Nasdaq closed well off of its lows. It was able to bounce off of its March trendline which happened to be a point above the May low. Let's see if those two support levels can continue to hold.

The S&P broke its May low and is closing in on its 50-day moving average. If that can't hold, 1,325 looks like the next support to me.

The Russell 2000 broke its March trendline but appears to have support just above 710, where the May lows and its 50 DMA are currently.

The Dow continued to lead the way down as it dove away from its 50-day moving average.

Just one change

One of the Fast Money guys mentioned the UltraShort Oil & Gas ProShares ETF (DUG) on yesterday's show. He questioned how that ETF, which is the double inverse of oil & gas could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index^SM

That "daily" part adds one complication to the picture. From the article 'Understanding ProShares' Long-Term Performance' on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).

A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than—or less than—what you’d expect over longer periods.

The article goes on to explain how & why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG -- the Dow Jones U.S. Oil & Gas Index^SM. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies." Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Below I've plotted oil vs. the index and Exxon Mobil over the last 12 months. (For ease of charting I'm going to use the United States Oil Fund ETF (USO) as a proxy for oil. USO may have its own issues but it tracks the actual price of oil close enough to make my point.)

This shows that the price of oil has seriously outperformed the index and Exxon Mobil. Here are the actual percentage changes for each:

• USO (oil) was up 113.2%
• the Dow Jones U.S. Oil & Gas Index^SM was up 24.5%
• Exxon Mobil was up 9.3%
• DUG was down 44.1%

Well at least USO and the Oil & Gas Index went in the same direction over the last 12 months. But on any given day, like today, they could trade opposite each other. And that means that DUG, on any given day, could trade with oil instead of opposite oil. I think many people would assume that if oil was down 5% DUG would be up 10%. That's clearly not a good assumption to make I'm seeing a lot of people talking about buying DUG to profit from a drop in oil prices. Given the performance data above I think they'd be better off shorting USO. (That is, if they can find shares of it to borrow -- I've had problems with that in the past.) Puts on USO may do the trick too.

Hopefully those who are trading DUG know that they're not playing the price of oil directly and won't be surprised on days like today when DUG and oil trade in the same direction. You've always got to know what comprises any ETF. I know that Google directs a lot of people to my list of inverse ETFs who are specifically searching for a way to short oil. Hopefully they do more research than just look at the name of the ETF and really find out what they're getting.

We had a respite from the selling yesterday but we're in for more today, at least at the open. Volume decreased yesterday and I expect the same today as the New Yorkers start heading for the Hamptons for the long weekend.

On Today's Calendar:

• 10:00 -- Existing Home Sales

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

DELL and MRVL are helping to lift the Nasdaq above its 200-day moving average this morning. Let's see if it can close above that important line...

On Today's Calendar:

• 9:45 -- Chicago PMI
• 10:00 -- Mich Sentiment-Rev.

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

We're starting to repeat what happened at the end of April when the dollar was rallying and gold dropping. The dollar made it back above its now upward-sloping 50-day moving average. Back on the 18th of this month I wrote about resistance for gold around 950. Well it didn't quite make it that far. Sellers stepped in around 935 and sent it back under its 50-day moving average. It'll be interesting to see if it takes out the May low or not.

Oil had some wild swings intraday thanks to the inventory report. It's cooling off some but it's certainly not broken.

I'm back to talking about 200-day moving averages again. Both the Russell 2000 and the Nasdaq traded above those moving averages intraday but sellers push them back beneath by the close. If the DELL news carries over we should see the Nasdaq gap over the 200 DMA in the morning.

A few changes today

The futures turned slightly negative after the 8:30 economic data. So were off to a choppy start but maybe the 10:30 oil inventories will give us some direction...

On Today's Calendar:

• 10:30 -- Crude Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The early strength gave way to a day of vacillating around unchanged. The indices ended the day up slightly on mildly higher volume. This looks and feels like just an oversold bounce that could peter out at any moment.

One change today

We've got some strength this morning. The futures were indicating a higher open earlier today and they got an extra boost from the 8:30 Durable Goods Report. Hopefully we'll get some more volume today...

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market was mixed for a good part of the morning but things picked up after noon, led by the Nasdaq. Oil pulling back a bit seems to have emboldened the bulls today. Judging by the light volume many people are still enjoying the holiday weekend.

The Nasdaq's looking pretty good after its textbook bounce off of the March trendline. But we can't sound the all-clear yet -- the 200-day moving average is just above.

The S&P still has a little work to do in order to break last week's downtrend like the Nasdaq did today.

Two changes today

On Today's Calendar:

• 10:00 -- New Home Sales
• 10:00 -- Consumer Confidence

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Selling resumed on Friday, especially in the larger cap NYSE stocks. It marked a bad end to a bad week for the bulls. But at least most of the indices are now short-term oversold.

Unlike the S&P 500, the Nasdaq closed well off of its lows. It was able to bounce off of its March trendline which happened to be a point above the May low. Let's see if those two support levels can continue to hold.

The S&P broke its May low and is closing in on its 50-day moving average. If that can't hold, 1,325 looks like the next support to me.

The Russell 2000 broke its March trendline but appears to have support just above 710, where the May lows and its 50 DMA are currently.

The Dow continued to lead the way down as it dove away from its 50-day moving average.

Just one change

One of the Fast Money guys mentioned the UltraShort Oil & Gas ProShares ETF (DUG) on yesterday's show. He questioned how that ETF, which is the double inverse of oil & gas could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index^SM

That "daily" part adds one complication to the picture. From the article 'Understanding ProShares' Long-Term Performance' on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).

A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than—or less than—what you’d expect over longer periods.

The article goes on to explain how & why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG -- the Dow Jones U.S. Oil & Gas Index^SM. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies." Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Below I've plotted oil vs. the index and Exxon Mobil over the last 12 months. (For ease of charting I'm going to use the United States Oil Fund ETF (USO) as a proxy for oil. USO may have its own issues but it tracks the actual price of oil close enough to make my point.)

This shows that the price of oil has seriously outperformed the index and Exxon Mobil. Here are the actual percentage changes for each:

• USO (oil) was up 113.2%
• the Dow Jones U.S. Oil & Gas Index^SM was up 24.5%
• Exxon Mobil was up 9.3%
• DUG was down 44.1%

Well at least USO and the Oil & Gas Index went in the same direction over the last 12 months. But on any given day, like today, they could trade opposite each other. And that means that DUG, on any given day, could trade with oil instead of opposite oil. I think many people would assume that if oil was down 5% DUG would be up 10%. That's clearly not a good assumption to make I'm seeing a lot of people talking about buying DUG to profit from a drop in oil prices. Given the performance data above I think they'd be better off shorting USO. (That is, if they can find shares of it to borrow -- I've had problems with that in the past.) Puts on USO may do the trick too.

Hopefully those who are trading DUG know that they're not playing the price of oil directly and won't be surprised on days like today when DUG and oil trade in the same direction. You've always got to know what comprises any ETF. I know that Google directs a lot of people to my list of inverse ETFs who are specifically searching for a way to short oil. Hopefully they do more research than just look at the name of the ETF and really find out what they're getting.

We had a respite from the selling yesterday but we're in for more today, at least at the open. Volume decreased yesterday and I expect the same today as the New Yorkers start heading for the Hamptons for the long weekend.

On Today's Calendar:

• 10:00 -- Existing Home Sales

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

DELL and MRVL are helping to lift the Nasdaq above its 200-day moving average this morning. Let's see if it can close above that important line...

On Today's Calendar:

• 9:45 -- Chicago PMI
• 10:00 -- Mich Sentiment-Rev.

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

We're starting to repeat what happened at the end of April when the dollar was rallying and gold dropping. The dollar made it back above its now upward-sloping 50-day moving average. Back on the 18th of this month I wrote about resistance for gold around 950. Well it didn't quite make it that far. Sellers stepped in around 935 and sent it back under its 50-day moving average. It'll be interesting to see if it takes out the May low or not.

Oil had some wild swings intraday thanks to the inventory report. It's cooling off some but it's certainly not broken.

I'm back to talking about 200-day moving averages again. Both the Russell 2000 and the Nasdaq traded above those moving averages intraday but sellers push them back beneath by the close. If the DELL news carries over we should see the Nasdaq gap over the 200 DMA in the morning.

A few changes today

The futures turned slightly negative after the 8:30 economic data. So were off to a choppy start but maybe the 10:30 oil inventories will give us some direction...

On Today's Calendar:

• 10:30 -- Crude Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The early strength gave way to a day of vacillating around unchanged. The indices ended the day up slightly on mildly higher volume. This looks and feels like just an oversold bounce that could peter out at any moment.

One change today

We've got some strength this morning. The futures were indicating a higher open earlier today and they got an extra boost from the 8:30 Durable Goods Report. Hopefully we'll get some more volume today...

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market was mixed for a good part of the morning but things picked up after noon, led by the Nasdaq. Oil pulling back a bit seems to have emboldened the bulls today. Judging by the light volume many people are still enjoying the holiday weekend.

The Nasdaq's looking pretty good after its textbook bounce off of the March trendline. But we can't sound the all-clear yet -- the 200-day moving average is just above.

The S&P still has a little work to do in order to break last week's downtrend like the Nasdaq did today.

Two changes today

On Today's Calendar:

• 10:00 -- New Home Sales
• 10:00 -- Consumer Confidence

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Selling resumed on Friday, especially in the larger cap NYSE stocks. It marked a bad end to a bad week for the bulls. But at least most of the indices are now short-term oversold.

Unlike the S&P 500, the Nasdaq closed well off of its lows. It was able to bounce off of its March trendline which happened to be a point above the May low. Let's see if those two support levels can continue to hold.

The S&P broke its May low and is closing in on its 50-day moving average. If that can't hold, 1,325 looks like the next support to me.

The Russell 2000 broke its March trendline but appears to have support just above 710, where the May lows and its 50 DMA are currently.

The Dow continued to lead the way down as it dove away from its 50-day moving average.

Just one change

One of the Fast Money guys mentioned the UltraShort Oil & Gas ProShares ETF (DUG) on yesterday's show. He questioned how that ETF, which is the double inverse of oil & gas could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index^SM

That "daily" part adds one complication to the picture. From the article 'Understanding ProShares' Long-Term Performance' on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).

A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than—or less than—what you’d expect over longer periods.

The article goes on to explain how & why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG -- the Dow Jones U.S. Oil & Gas Index^SM. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies." Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Below I've plotted oil vs. the index and Exxon Mobil over the last 12 months. (For ease of charting I'm going to use the United States Oil Fund ETF (USO) as a proxy for oil. USO may have its own issues but it tracks the actual price of oil close enough to make my point.)

This shows that the price of oil has seriously outperformed the index and Exxon Mobil. Here are the actual percentage changes for each:

• USO (oil) was up 113.2%
• the Dow Jones U.S. Oil & Gas Index^SM was up 24.5%
• Exxon Mobil was up 9.3%
• DUG was down 44.1%

Well at least USO and the Oil & Gas Index went in the same direction over the last 12 months. But on any given day, like today, they could trade opposite each other. And that means that DUG, on any given day, could trade with oil instead of opposite oil. I think many people would assume that if oil was down 5% DUG would be up 10%. That's clearly not a good assumption to make I'm seeing a lot of people talking about buying DUG to profit from a drop in oil prices. Given the performance data above I think they'd be better off shorting USO. (That is, if they can find shares of it to borrow -- I've had problems with that in the past.) Puts on USO may do the trick too.

Hopefully those who are trading DUG know that they're not playing the price of oil directly and won't be surprised on days like today when DUG and oil trade in the same direction. You've always got to know what comprises any ETF. I know that Google directs a lot of people to my list of inverse ETFs who are specifically searching for a way to short oil. Hopefully they do more research than just look at the name of the ETF and really find out what they're getting.

We had a respite from the selling yesterday but we're in for more today, at least at the open. Volume decreased yesterday and I expect the same today as the New Yorkers start heading for the Hamptons for the long weekend.

On Today's Calendar:

• 10:00 -- Existing Home Sales

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

DELL and MRVL are helping to lift the Nasdaq above its 200-day moving average this morning. Let's see if it can close above that important line...

On Today's Calendar:

• 9:45 -- Chicago PMI
• 10:00 -- Mich Sentiment-Rev.

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

We're starting to repeat what happened at the end of April when the dollar was rallying and gold dropping. The dollar made it back above its now upward-sloping 50-day moving average. Back on the 18th of this month I wrote about resistance for gold around 950. Well it didn't quite make it that far. Sellers stepped in around 935 and sent it back under its 50-day moving average. It'll be interesting to see if it takes out the May low or not.

Oil had some wild swings intraday thanks to the inventory report. It's cooling off some but it's certainly not broken.

I'm back to talking about 200-day moving averages again. Both the Russell 2000 and the Nasdaq traded above those moving averages intraday but sellers push them back beneath by the close. If the DELL news carries over we should see the Nasdaq gap over the 200 DMA in the morning.

A few changes today

The futures turned slightly negative after the 8:30 economic data. So were off to a choppy start but maybe the 10:30 oil inventories will give us some direction...

On Today's Calendar:

• 10:30 -- Crude Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The early strength gave way to a day of vacillating around unchanged. The indices ended the day up slightly on mildly higher volume. This looks and feels like just an oversold bounce that could peter out at any moment.

One change today

We've got some strength this morning. The futures were indicating a higher open earlier today and they got an extra boost from the 8:30 Durable Goods Report. Hopefully we'll get some more volume today...

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market was mixed for a good part of the morning but things picked up after noon, led by the Nasdaq. Oil pulling back a bit seems to have emboldened the bulls today. Judging by the light volume many people are still enjoying the holiday weekend.

The Nasdaq's looking pretty good after its textbook bounce off of the March trendline. But we can't sound the all-clear yet -- the 200-day moving average is just above.

The S&P still has a little work to do in order to break last week's downtrend like the Nasdaq did today.

Two changes today

On Today's Calendar:

• 10:00 -- New Home Sales
• 10:00 -- Consumer Confidence

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Selling resumed on Friday, especially in the larger cap NYSE stocks. It marked a bad end to a bad week for the bulls. But at least most of the indices are now short-term oversold.

Unlike the S&P 500, the Nasdaq closed well off of its lows. It was able to bounce off of its March trendline which happened to be a point above the May low. Let's see if those two support levels can continue to hold.

The S&P broke its May low and is closing in on its 50-day moving average. If that can't hold, 1,325 looks like the next support to me.

The Russell 2000 broke its March trendline but appears to have support just above 710, where the May lows and its 50 DMA are currently.

The Dow continued to lead the way down as it dove away from its 50-day moving average.

Just one change

One of the Fast Money guys mentioned the UltraShort Oil & Gas ProShares ETF (DUG) on yesterday's show. He questioned how that ETF, which is the double inverse of oil & gas could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index^SM

That "daily" part adds one complication to the picture. From the article 'Understanding ProShares' Long-Term Performance' on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).

A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than—or less than—what you’d expect over longer periods.

The article goes on to explain how & why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG -- the Dow Jones U.S. Oil & Gas Index^SM. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies." Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Below I've plotted oil vs. the index and Exxon Mobil over the last 12 months. (For ease of charting I'm going to use the United States Oil Fund ETF (USO) as a proxy for oil. USO may have its own issues but it tracks the actual price of oil close enough to make my point.)

This shows that the price of oil has seriously outperformed the index and Exxon Mobil. Here are the actual percentage changes for each:

• USO (oil) was up 113.2%
• the Dow Jones U.S. Oil & Gas Index^SM was up 24.5%
• Exxon Mobil was up 9.3%
• DUG was down 44.1%

Well at least USO and the Oil & Gas Index went in the same direction over the last 12 months. But on any given day, like today, they could trade opposite each other. And that means that DUG, on any given day, could trade with oil instead of opposite oil. I think many people would assume that if oil was down 5% DUG would be up 10%. That's clearly not a good assumption to make I'm seeing a lot of people talking about buying DUG to profit from a drop in oil prices. Given the performance data above I think they'd be better off shorting USO. (That is, if they can find shares of it to borrow -- I've had problems with that in the past.) Puts on USO may do the trick too.

Hopefully those who are trading DUG know that they're not playing the price of oil directly and won't be surprised on days like today when DUG and oil trade in the same direction. You've always got to know what comprises any ETF. I know that Google directs a lot of people to my list of inverse ETFs who are specifically searching for a way to short oil. Hopefully they do more research than just look at the name of the ETF and really find out what they're getting.

We had a respite from the selling yesterday but we're in for more today, at least at the open. Volume decreased yesterday and I expect the same today as the New Yorkers start heading for the Hamptons for the long weekend.

On Today's Calendar:

• 10:00 -- Existing Home Sales

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

DELL and MRVL are helping to lift the Nasdaq above its 200-day moving average this morning. Let's see if it can close above that important line...

On Today's Calendar:

• 9:45 -- Chicago PMI
• 10:00 -- Mich Sentiment-Rev.

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

We're starting to repeat what happened at the end of April when the dollar was rallying and gold dropping. The dollar made it back above its now upward-sloping 50-day moving average. Back on the 18th of this month I wrote about resistance for gold around 950. Well it didn't quite make it that far. Sellers stepped in around 935 and sent it back under its 50-day moving average. It'll be interesting to see if it takes out the May low or not.

Oil had some wild swings intraday thanks to the inventory report. It's cooling off some but it's certainly not broken.

I'm back to talking about 200-day moving averages again. Both the Russell 2000 and the Nasdaq traded above those moving averages intraday but sellers push them back beneath by the close. If the DELL news carries over we should see the Nasdaq gap over the 200 DMA in the morning.

A few changes today

The futures turned slightly negative after the 8:30 economic data. So were off to a choppy start but maybe the 10:30 oil inventories will give us some direction...

On Today's Calendar:

• 10:30 -- Crude Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The early strength gave way to a day of vacillating around unchanged. The indices ended the day up slightly on mildly higher volume. This looks and feels like just an oversold bounce that could peter out at any moment.

One change today

We've got some strength this morning. The futures were indicating a higher open earlier today and they got an extra boost from the 8:30 Durable Goods Report. Hopefully we'll get some more volume today...

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market was mixed for a good part of the morning but things picked up after noon, led by the Nasdaq. Oil pulling back a bit seems to have emboldened the bulls today. Judging by the light volume many people are still enjoying the holiday weekend.

The Nasdaq's looking pretty good after its textbook bounce off of the March trendline. But we can't sound the all-clear yet -- the 200-day moving average is just above.

The S&P still has a little work to do in order to break last week's downtrend like the Nasdaq did today.

Two changes today

On Today's Calendar:

• 10:00 -- New Home Sales
• 10:00 -- Consumer Confidence

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Selling resumed on Friday, especially in the larger cap NYSE stocks. It marked a bad end to a bad week for the bulls. But at least most of the indices are now short-term oversold.

Unlike the S&P 500, the Nasdaq closed well off of its lows. It was able to bounce off of its March trendline which happened to be a point above the May low. Let's see if those two support levels can continue to hold.

The S&P broke its May low and is closing in on its 50-day moving average. If that can't hold, 1,325 looks like the next support to me.

The Russell 2000 broke its March trendline but appears to have support just above 710, where the May lows and its 50 DMA are currently.

The Dow continued to lead the way down as it dove away from its 50-day moving average.

Just one change

One of the Fast Money guys mentioned the UltraShort Oil & Gas ProShares ETF (DUG) on yesterday's show. He questioned how that ETF, which is the double inverse of oil & gas could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index^SM

That "daily" part adds one complication to the picture. From the article 'Understanding ProShares' Long-Term Performance' on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).

A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than—or less than—what you’d expect over longer periods.

The article goes on to explain how & why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG -- the Dow Jones U.S. Oil & Gas Index^SM. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies." Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Below I've plotted oil vs. the index and Exxon Mobil over the last 12 months. (For ease of charting I'm going to use the United States Oil Fund ETF (USO) as a proxy for oil. USO may have its own issues but it tracks the actual price of oil close enough to make my point.)

This shows that the price of oil has seriously outperformed the index and Exxon Mobil. Here are the actual percentage changes for each:

• USO (oil) was up 113.2%
• the Dow Jones U.S. Oil & Gas Index^SM was up 24.5%
• Exxon Mobil was up 9.3%
• DUG was down 44.1%

Well at least USO and the Oil & Gas Index went in the same direction over the last 12 months. But on any given day, like today, they could trade opposite each other. And that means that DUG, on any given day, could trade with oil instead of opposite oil. I think many people would assume that if oil was down 5% DUG would be up 10%. That's clearly not a good assumption to make I'm seeing a lot of people talking about buying DUG to profit from a drop in oil prices. Given the performance data above I think they'd be better off shorting USO. (That is, if they can find shares of it to borrow -- I've had problems with that in the past.) Puts on USO may do the trick too.

Hopefully those who are trading DUG know that they're not playing the price of oil directly and won't be surprised on days like today when DUG and oil trade in the same direction. You've always got to know what comprises any ETF. I know that Google directs a lot of people to my list of inverse ETFs who are specifically searching for a way to short oil. Hopefully they do more research than just look at the name of the ETF and really find out what they're getting.

We had a respite from the selling yesterday but we're in for more today, at least at the open. Volume decreased yesterday and I expect the same today as the New Yorkers start heading for the Hamptons for the long weekend.

On Today's Calendar:

• 10:00 -- Existing Home Sales

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

DELL and MRVL are helping to lift the Nasdaq above its 200-day moving average this morning. Let's see if it can close above that important line...

On Today's Calendar:

• 9:45 -- Chicago PMI
• 10:00 -- Mich Sentiment-Rev.

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

We're starting to repeat what happened at the end of April when the dollar was rallying and gold dropping. The dollar made it back above its now upward-sloping 50-day moving average. Back on the 18th of this month I wrote about resistance for gold around 950. Well it didn't quite make it that far. Sellers stepped in around 935 and sent it back under its 50-day moving average. It'll be interesting to see if it takes out the May low or not.

Oil had some wild swings intraday thanks to the inventory report. It's cooling off some but it's certainly not broken.

I'm back to talking about 200-day moving averages again. Both the Russell 2000 and the Nasdaq traded above those moving averages intraday but sellers push them back beneath by the close. If the DELL news carries over we should see the Nasdaq gap over the 200 DMA in the morning.

A few changes today

The futures turned slightly negative after the 8:30 economic data. So were off to a choppy start but maybe the 10:30 oil inventories will give us some direction...

On Today's Calendar:

• 10:30 -- Crude Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The early strength gave way to a day of vacillating around unchanged. The indices ended the day up slightly on mildly higher volume. This looks and feels like just an oversold bounce that could peter out at any moment.

One change today

We've got some strength this morning. The futures were indicating a higher open earlier today and they got an extra boost from the 8:30 Durable Goods Report. Hopefully we'll get some more volume today...

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market was mixed for a good part of the morning but things picked up after noon, led by the Nasdaq. Oil pulling back a bit seems to have emboldened the bulls today. Judging by the light volume many people are still enjoying the holiday weekend.

The Nasdaq's looking pretty good after its textbook bounce off of the March trendline. But we can't sound the all-clear yet -- the 200-day moving average is just above.

The S&P still has a little work to do in order to break last week's downtrend like the Nasdaq did today.

Two changes today

On Today's Calendar:

• 10:00 -- New Home Sales
• 10:00 -- Consumer Confidence

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Selling resumed on Friday, especially in the larger cap NYSE stocks. It marked a bad end to a bad week for the bulls. But at least most of the indices are now short-term oversold.

Unlike the S&P 500, the Nasdaq closed well off of its lows. It was able to bounce off of its March trendline which happened to be a point above the May low. Let's see if those two support levels can continue to hold.

The S&P broke its May low and is closing in on its 50-day moving average. If that can't hold, 1,325 looks like the next support to me.

The Russell 2000 broke its March trendline but appears to have support just above 710, where the May lows and its 50 DMA are currently.

The Dow continued to lead the way down as it dove away from its 50-day moving average.

Just one change

One of the Fast Money guys mentioned the UltraShort Oil & Gas ProShares ETF (DUG) on yesterday's show. He questioned how that ETF, which is the double inverse of oil & gas could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index^SM

That "daily" part adds one complication to the picture. From the article 'Understanding ProShares' Long-Term Performance' on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).

A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than—or less than—what you’d expect over longer periods.

The article goes on to explain how & why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG -- the Dow Jones U.S. Oil & Gas Index^SM. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies." Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Below I've plotted oil vs. the index and Exxon Mobil over the last 12 months. (For ease of charting I'm going to use the United States Oil Fund ETF (USO) as a proxy for oil. USO may have its own issues but it tracks the actual price of oil close enough to make my point.)

This shows that the price of oil has seriously outperformed the index and Exxon Mobil. Here are the actual percentage changes for each:

• USO (oil) was up 113.2%
• the Dow Jones U.S. Oil & Gas Index^SM was up 24.5%
• Exxon Mobil was up 9.3%
• DUG was down 44.1%

Well at least USO and the Oil & Gas Index went in the same direction over the last 12 months. But on any given day, like today, they could trade opposite each other. And that means that DUG, on any given day, could trade with oil instead of opposite oil. I think many people would assume that if oil was down 5% DUG would be up 10%. That's clearly not a good assumption to make I'm seeing a lot of people talking about buying DUG to profit from a drop in oil prices. Given the performance data above I think they'd be better off shorting USO. (That is, if they can find shares of it to borrow -- I've had problems with that in the past.) Puts on USO may do the trick too.

Hopefully those who are trading DUG know that they're not playing the price of oil directly and won't be surprised on days like today when DUG and oil trade in the same direction. You've always got to know what comprises any ETF. I know that Google directs a lot of people to my list of inverse ETFs who are specifically searching for a way to short oil. Hopefully they do more research than just look at the name of the ETF and really find out what they're getting.

We had a respite from the selling yesterday but we're in for more today, at least at the open. Volume decreased yesterday and I expect the same today as the New Yorkers start heading for the Hamptons for the long weekend.

On Today's Calendar:

• 10:00 -- Existing Home Sales

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

DELL and MRVL are helping to lift the Nasdaq above its 200-day moving average this morning. Let's see if it can close above that important line...

On Today's Calendar:

• 9:45 -- Chicago PMI
• 10:00 -- Mich Sentiment-Rev.

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

We're starting to repeat what happened at the end of April when the dollar was rallying and gold dropping. The dollar made it back above its now upward-sloping 50-day moving average. Back on the 18th of this month I wrote about resistance for gold around 950. Well it didn't quite make it that far. Sellers stepped in around 935 and sent it back under its 50-day moving average. It'll be interesting to see if it takes out the May low or not.

Oil had some wild swings intraday thanks to the inventory report. It's cooling off some but it's certainly not broken.

I'm back to talking about 200-day moving averages again. Both the Russell 2000 and the Nasdaq traded above those moving averages intraday but sellers push them back beneath by the close. If the DELL news carries over we should see the Nasdaq gap over the 200 DMA in the morning.

A few changes today

The futures turned slightly negative after the 8:30 economic data. So were off to a choppy start but maybe the 10:30 oil inventories will give us some direction...

On Today's Calendar:

• 10:30 -- Crude Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The early strength gave way to a day of vacillating around unchanged. The indices ended the day up slightly on mildly higher volume. This looks and feels like just an oversold bounce that could peter out at any moment.

One change today

We've got some strength this morning. The futures were indicating a higher open earlier today and they got an extra boost from the 8:30 Durable Goods Report. Hopefully we'll get some more volume today...

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market was mixed for a good part of the morning but things picked up after noon, led by the Nasdaq. Oil pulling back a bit seems to have emboldened the bulls today. Judging by the light volume many people are still enjoying the holiday weekend.

The Nasdaq's looking pretty good after its textbook bounce off of the March trendline. But we can't sound the all-clear yet -- the 200-day moving average is just above.

The S&P still has a little work to do in order to break last week's downtrend like the Nasdaq did today.

Two changes today

On Today's Calendar:

• 10:00 -- New Home Sales
• 10:00 -- Consumer Confidence

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Selling resumed on Friday, especially in the larger cap NYSE stocks. It marked a bad end to a bad week for the bulls. But at least most of the indices are now short-term oversold.

Unlike the S&P 500, the Nasdaq closed well off of its lows. It was able to bounce off of its March trendline which happened to be a point above the May low. Let's see if those two support levels can continue to hold.

The S&P broke its May low and is closing in on its 50-day moving average. If that can't hold, 1,325 looks like the next support to me.

The Russell 2000 broke its March trendline but appears to have support just above 710, where the May lows and its 50 DMA are currently.

The Dow continued to lead the way down as it dove away from its 50-day moving average.

Just one change

One of the Fast Money guys mentioned the UltraShort Oil & Gas ProShares ETF (DUG) on yesterday's show. He questioned how that ETF, which is the double inverse of oil & gas could be up for the day while oil was also up. A quick look at what DUG actually is gives the answer:

UltraShort Oil & Gas ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index^SM

That "daily" part adds one complication to the picture. From the article 'Understanding ProShares' Long-Term Performance' on ProShares' site:

ProShares are designed to provide either 200%, -200% or -100% of index performance on a daily basis (before fees and expenses).

A common misconception is that ProShares should also provide 200%, -200% or -100% of index performance over longer periods, such as a week, month or year. However, ProShares' returns may be greater than—or less than—what you’d expect over longer periods.

The article goes on to explain how & why this happens. But the question about how DUG could be up while the price of oil was also up is answered by looking at what comprises DUG -- the Dow Jones U.S. Oil & Gas Index^SM. That index "measures the performance of the energy sector of the U.S. equity market. Component companies include oil drilling equipment and services, coal, oil companies-major, oil companies-secondary, pipelines, liquid, solid or gaseous fossil fuel producers and service companies." Note that the actual price of oil is not mentioned. When you look at how that index is constructed you'll see that ExxonMobil Corp. (XOM) makes up 28%, Chevron Corp. is 11% and ConocoPhillips is 7%. So at least 46% of the index is big oil companies (major integrated oil & gas). Then the question is how does the price of oil relate to movements in those oil companies? Below I've plotted oil vs. the index and Exxon Mobil over the last 12 months. (For ease of charting I'm going to use the United States Oil Fund ETF (USO) as a proxy for oil. USO may have its own issues but it tracks the actual price of oil close enough to make my point.)

This shows that the price of oil has seriously outperformed the index and Exxon Mobil. Here are the actual percentage changes for each:

• USO (oil) was up 113.2%
• the Dow Jones U.S. Oil & Gas Index^SM was up 24.5%
• Exxon Mobil was up 9.3%
• DUG was down 44.1%

Well at least USO and the Oil & Gas Index went in the same direction over the last 12 months. But on any given day, like today, they could trade opposite each other. And that means that DUG, on any given day, could trade with oil instead of opposite oil. I think many people would assume that if oil was down 5% DUG would be up 10%. That's clearly not a good assumption to make I'm seeing a lot of people talking about buying DUG to profit from a drop in oil prices. Given the performance data above I think they'd be better off shorting USO. (That is, if they can find shares of it to borrow -- I've had problems with that in the past.) Puts on USO may do the trick too.

Hopefully those who are trading DUG know that they're not playing the price of oil directly and won't be surprised on days like today when DUG and oil trade in the same direction. You've always got to know what comprises any ETF. I know that Google directs a lot of people to my list of inverse ETFs who are specifically searching for a way to short oil. Hopefully they do more research than just look at the name of the ETF and really find out what they're getting.

We had a respite from the selling yesterday but we're in for more today, at least at the open. Volume decreased yesterday and I expect the same today as the New Yorkers start heading for the Hamptons for the long weekend.

On Today's Calendar:

• 10:00 -- Existing Home Sales

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

DELL and MRVL are helping to lift the Nasdaq above its 200-day moving average this morning. Let's see if it can close above that important line...

On Today's Calendar:

• 9:45 -- Chicago PMI
• 10:00 -- Mich Sentiment-Rev.

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

We're starting to repeat what happened at the end of April when the dollar was rallying and gold dropping. The dollar made it back above its now upward-sloping 50-day moving average. Back on the 18th of this month I wrote about resistance for gold around 950. Well it didn't quite make it that far. Sellers stepped in around 935 and sent it back under its 50-day moving average. It'll be interesting to see if it takes out the May low or not.

Oil had some wild swings intraday thanks to the inventory report. It's cooling off some but it's certainly not broken.

I'm back to talking about 200-day moving averages again. Both the Russell 2000 and the Nasdaq traded above those moving averages intraday but sellers push them back beneath by the close. If the DELL news carries over we should see the Nasdaq gap over the 200 DMA in the morning.

A few changes today

The futures turned slightly negative after the 8:30 economic data. So were off to a choppy start but maybe the 10:30 oil inventories will give us some direction...

On Today's Calendar:

• 10:30 -- Crude Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The early strength gave way to a day of vacillating around unchanged. The indices ended the day up slightly on mildly higher volume. This looks and feels like just an oversold bounce that could peter out at any moment.

One change today

We've got some strength this morning. The futures were indicating a higher open earlier today and they got an extra boost from the 8:30 Durable Goods Report. Hopefully we'll get some more volume today...

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market was mixed for a good part of the morning but things picked up after noon, led by the Nasdaq. Oil pulling back a bit seems to have emboldened the bulls today. Judging by the light volume many people are still enjoying the holiday weekend.

The Nasdaq's looking pretty good after its textbook bounce off of the March trendline. But we can't sound the all-clear yet -- the 200-day moving average is just above.

The S&P still has a little work to do in order to break last week's downtrend like the Nasdaq did today.