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Reality,
the explanation from Jimmy Rogers is interesting. I'm thinking along similar lines ... although not as succinctly :(
I'm looking for a way to get long on oil (commodity) by buying leaps, but am having trouble finding a vehicle I like - preferably an ETF
Reasoning --
1. If the world economy is really on the mend, then the demand for oil will return accompanied by price increases.
2. If Israel decides to make a preemptive strike against Iran, the US will not be very popular in the region (understatement !!). I would also expect the Strait of Hormuz to be shutdown for a while. That in itself will drive oil prices higher.
3. If the USD is no longer the preferred currency, that would certainly disrupt the US oil market. Although I'm sure our "friends" would gladly accept more of our dollars for less oil....
Anyhow, just rambling thoughts... Thanks for listening
Bruce
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thanks guys,
I know the uso trades the front month contract an maybe that has something to do with it.
If you look at the chart, the correlation was pretty good since 2007 until 1q09. I was wondering why the correlation has changed.
I know the leveraged etfs can't track their benchmarks.
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can anyone give explanation for the divergence for USO v XOIL since 1Q09?? (3 day chart)
I'm anticipating a geopolitical play but the divergece is confusing me 
I'm strictly equity trader, not into futures.
Bruce
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you may want to look at USO etf. If I remember correctly, it tracks/purchases front end contracts on west tx crude
Bruce
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