All eyes are on the troubled financial sector this earnings season as investors look for signs that the system is on the mend:

• Wells Fargo (NYSE: WFC) reported that its profit jumped 61%, but its loan losses also jumped to more than $5 billion. Wells Fargo is simply getting in line with other big banks, which have also reported big losses from loans gone bad, reports the Associated Press.
• Morgan Stanley (NYSE: MS) beat analysts’ expectations by reporting consolidated net revenues of $8.7 billion. The profit ends a three-quarter losing streak, and it can be attributed to Morgan Stanley’s new conservative stance in the wake of the financial collapse, Reuters reports.

Financial Select Sector SPDR (NYSEArca: XLF) is up about 1% this morning; Wells Fargo is 9.3%; Morgan Stanley is 2.8%

The euro has topped $1.50 against the dollar, a key threshold that raises concerns in Europe about what impact the strong currency will have on its recovering economy. European policy makers have been trying to make the euro weaker, but the markets aren’t paying attention, Neil Shah for The Wall Street Journal reports. CurrencyShares Euro Trust (NYSEArca: FXE) is up about 0.5% this morning.

A drop in gasoline inventories and a weakening dollar also contributed to the price of oil jumping close to $80 a barrel this morning. While the data was close to what analysts expected, it also confirmed that refiners have cut back enough that it’s depleted inventories, reports Brian Baskin for The Wall Street Journal. Last week, oil refiners pushed rates up to 81.1% of capacity, slightly higher than the week before. United States Gasoline (NYSEArca: UGA) is up nearly 2% this morning.

Read the disclaimer, as Tom Lydon is a board member of Rydex Funds.

The summer months are officially over, unemployment rates continue to creep up and consumers are holding onto their wallets. As a result, demand for gasoline has declined and continues to weaken.  Nearly a year ago, gas prices were north of $4/gallon in certain parts of the nation, but today it’s a far cry from that.  AAA recently announced that the national average for a gallon of gasoline is $2.46 and expected to keep declining.

From a consumer’s perspective, this is a good thing.  For the overall economy, it is putting a damper on state jobs as the Department of Transportation in many states banks on revenues generated from gasoline taxes.

According to Ashley Halsey III for The Washington Post, it isn’t necessarily a given that gasoline prices will continue to decline.  Halsey states that if negotiations with Iran over its nuclear ambitions falter, the trend toward lower prices could reverse abruptly.

Regardless of what happens to gasoline in the future, one can play it either way.  To go long on gasoline, one can utilize the United States Gasoline Fund (NYSEArca: UGA). The ETF is up 66% year-to-date and is flirting with its 200-day moving average.

To short the market, one can look at the ProShares Short Oil & Gas (NYSEArca: DDG), which is down 4.7% in the last month.

For more stories on gasoline, visit our gasoline category.

Kevin Grewal contributed to this article.

Labor Day can be considered a week late this year – the holiday falls on Sept. 7. Last year, Labor Day fell on Sept. 1, which was before the start of the school year for many students.

According to a survey, AAA said it is projecting that 39.1 million travelers will take a trip of 50 miles or more from home this Labor Day, a 13.3% decrease from Labor Day 2008. Many Americans are simply staying put this Labor Day and choosing to stay near home, says Chris Reidy for The Boston Globe.

While higher gas prices might have given rise to the “staycation,” they’ve been benefiting funds like United States Gasoline (UGA), which is up 70.1% year-to-date.

As the markets are beginning to show strength and signs of health are beginning to appear in the economy, this could be an opportunity to reevaluate your strategy before summer ends and the markets re-open. In fact, our latest ETF book which has just been released and is finally available online, making a perfect Labor Day read!

Have a fun weekend!

Remember, though, that while forecasts are informative, unforeseen events could cause the reality to play out differently. While you keep these predictions in mind, have an entry and exit strategy if you’re thinking of investing in energy ETFs.

• U.S. Crude Oil. Crude oil prices are going to remain volatile, while the WTI spot price is projected to rise slowly as economic conditions improve, to an average of about $72 per barrel in 2010. Expect crude prices to hover around $70 per barrel for the fourth quarter. United States Oil (USO) is up 15.7% year-to-date

• Gasoline. The average price for regular-grade gasoline, which reached a summer peak of $2.69 per gallon in EIA’s June 22 weekly survey, fell by more than 20 cents per gallon in  the four weeks following the drop in crude oil prices. Now, however, they’re bouncing back. EIA expects the annual average regular-grade gasoline retail price in 2009 to be $2.34 per gallon.  Higher projected crude oil prices next year are expected to increase the average price to $2.66 per gallon in 2010. United States Gasoline (UGA) is up 82.2% year-to-date

• Natural Gas. Natural gas inventories are expected to set a new record high at the end of this year’s injection season (Oct. 31). Natural gas production is projected to remain flat this year, then fall by 2.8% in 2010. United States Natural Gas (UNG) is down 49.6% year-to-date

• Coal. Coal consumption in the electric power sector has declined 6.4%, but it’s expected to climb 1.3% in 2010. Coal production is projected to drop off by 8% this year, thanks to lower consumption, fewer exports and higher inventories. That trend is predicted to continue into 2010. Market Vectors Coal (KOL) is up 94.4% year-to-date

• Electricity Total retail sales of electricity are projected to decline by 2.7% throughout the United States during 2009.  Sales in the industrial sector are projected to decrease by about 10% this year because of the weak economy. For 2010, a 0.8% rise is expected. iShares Dow Jones U.S. Utility Index (IDU) up 5.7% year-to-date

For more stories about commodities, visit our commodity category.

Over the last two weeks, the CFTC has heard from a total of 23 players in the commodities trading world, representing all sides of the argument. Brain Baskin for CNN Money reports that the CFTC didn’t drop many hints about what form any caps would take, but the agency has apparently settled on limits as a potential solution.

If the CFTC goes in this direction, Chairman Gary Gensler said the agency will have to “find common ground” between financial investors and the critics who hope to see certain types of investors banned entirely.

Meanwhile, the natural gas ETF has been taking a hit as futures have fallen the most in two months.  A government report has shown that U.S. stockpiles are larger than expected, reports Reg Curren for Bloomberg, forcing prices lower.

• United States Natural Gas (UNG): down 43% year-to-date

Meanwhile, the prices at the pump have risen slightly since July’s dip. Analysts do not believe that there is anything to support a prolonged increase. Much of the recent price jump reflects the rising price of crude, as this is an action that has resulted from the prospects of a global recovery, explains Ana Campoy for The Wall Street Journal. As the summer driving season comes to a close, some believe that prices may begin to back off.

• United States Gasoline (UGA): up 82.9% year-to-date

For more stories about natural gas or gasoline, visit our natural gas or gasoline categories.

There have been a number of stellar performers in recent weeks – these are just a few that caught our notice. Bear in mind that wherever you choose to place your money, always have a strategy for both entry and exit, since no trend lasts forever.

Turkey has several factors in its favor: the central bank has reduced rates to its lo a record low, consumer confidence is on the rise and jobless claims are declining. The country’s stocks have recently recovered to pre-crisis levels and it is reflected in the country’s ETFs.

• iShares MSCI Turkey Invest Mkt Index (TUR): up 76% year-to-date; up 19.5% in the last two weeks

Oil is what makes the world go ’round, and the price of oil may continue to rise as economies recover. Once the global economy sees normalcy, some feel that it’s likely that oil will see higher demand and a lower supply, which would naturally result in the higher price of oil and gas at the pumps.

• United States Gasoline (UGA): up 82.1% year-to-date; up 14.5% in the last  two weeks

Coal has a couple of good things going for the sector: reduction in capital expenditure by producers, a weaker U.S. dollar, as well as increases in both steel and electricity consumption. Lobbyists are also fighting on Capitol Hill for more perks for the industry.

• Market Vectors Coal ETF (KOL): up 93% year-to-date; up 14.9% in the last two weeks

In retail, some high-end consumers are increasing their intake of goods. Many countries are reporting rises in exports and trade surplus, and some luxury retailers are quietly discounting items to drum up more business. So far, the tactic seems to be working.

• Claymore/Robb Report Global Luxury (ROB): up 32.4% year-to-date; up 11.9% in the last two weeks

The ETF that tracks regional banks is producing impressive results considering that many believe regional banks are closing or in trouble because of commercial REITs. MarketWatch says strong profits and good reports from large banks has helped buoy the financial sector and regional banks may be along for the ride.

• SPDR KBW Regional Banking (KRE): down 25.2% year-to-date; up 23.7% in the last two weeks

Max Chen contributed to this article.

There are reports floating around that the CFTC is preparing to blame speculators for the run-up in energy prices. However, Reuters reports that the CFTC head dismissed the rumors as both “premature” and “inaccurate.” The CFTC is in the midst of three hearings, the first of which took place today.

Britain’s financial regulator today has found no evidence that speculators are behind wild swings in oil prices, report Alistair MacDonald and Carolyn Cui for The Wall Street Journal. Instead, the regulator may attribute it to economic uncertainty.

Some believe that the production of oil, natural gas and coal are going to peak and go into a decline within the next decade. There is nothing that technology can do to save the resources themselves, and production will just continue to wane as we stop using the commodities.

Chris Nelder for Forbes says that “peak oil” is not about running out of oil, it is about reaching the peak rate of production, as we tap out of the resource. As of now, there are no cheaper substitutes snd oil production is expected to go into terminal decline by around 2012. The major oil fields are being depleted, and new discoveries are smaller and of less quality.

Where does that leave us?

Thanks to innovation, the next generation of alternative fuels is in the works. Mark Mills for Forbes says that oil demand will continue to rise as economies recover, but the supply picture isn’t going to change, meaning that we should fasten our seat belts for more potential price volatility.

Mills says anything with a hint of carbon or hydrogen can be reasonably engineered into oil equivalent fuels. As new methods appear, Mills says, it could free up the oil supply where other non-liquid alternative fuels do the trick. His book, The Bottomless Well, deals with the idea of the tech world taking over energy in the pursuit of maintaining our lives as we know them.

• iShares Dow Jones U.S. Oil & Gas ETF (IEO): up 18.2% year-to-date

• United States Gasoline (UGA): up 68.6% year-to-date

• United States Oil (USO): up 9.7% year-to-date

For more stories about oil, visit our oil category.

Of the energy futures in questions, the CFTC is primarily putting its focus on crude oil, heating oil, natural gas and gasoline. The reason behind this is because of the recent stir up by some stating that speculators are to blame for the volatility in commodities over the last few years, states Eric Fox of Brittain Capital Management LLC for Investopedia.

Any new rules could impact ETFs that track an underlying commodity, such as United States Oil Fund (USO), United States Natural Gas (UNG) and PowerShares DB Gold (DGL), to name just a few.

Such commodity ETFs are not governed by the Investment Company Act of 1940 and are considered commodity pools.  Although many believe that these ETFs are a  straightforward play on commodities that may physically hold the commodity in question,  they are in fact composed of futures contracts and seek to match the return of the benchmark commodity.

The way that these ETFs work is that the managers of the funds issue creation baskets in increments of a certain number of units and offer them for sale to authorized purchasers, which are generally large brokerage firms.  However, sometimes the fund can hit a limit of units and “freeze” trading, in the case of the natural gas ETF.

This regulation is being imposed at a time when the Obama administration is trying to increase transparency and regulation of the financial markets.

For more stories on commodities, visit our commodities category.

Kevin Grewal contributed to this article.

Oil and gas prices have been all over the map these days. After reached record highs in 2008, energy prices collapsed, then rose again, but are now sinking under the weight of weaker demand. John Spence for MarketWatch points out that Moody’s says an economic recovery in 2010 is expected to be slow and painful, and crimp demand for energy commodities.

United States Gasoline Fund (UGA) is the only ETF tied to gas prices. There are some things investors should know about it:

• Its 0.60% management fee doesn’t include trading expenses
• It doesn’t track the spot price of oil; it follows the futures price of unleaded gas
• It typically invests in the near-month contract
• Its structure can result in some tax issues, so consult your accountant and be aware of what your implications might be

Take heart – even though gas prices have crept up, they’re nowhere near last summer’s highs of more than $4 a gallon. But if you drive a considerable amount and you’re concerned about rising gas prices, UGA can be a way to hedge. One way is to figure out what you spend per year on gas, then buy a corresponding amount in shares.

When it comes to commodity ETFs, it’s always wise to have a strategy. Use specific signals to determine when you enter a position and when you leave it to protect yourself against volatility. Our trend following report can help you craft a strategy.

For more stories on oil and gas exchange traded funds, visit our oil and gas ETF categories.

Some commodities have performed a bit better than others in recent months.  Now that inflation fears have been put on the back burner by the Federal Reserve, will the commodities that outperformed this year resume their uptrends anytime soon, or simply hold steady for the time being? No one knows, so watch the trend lines for signals.

If the prices continue to decline from this point, have an exit strategy in place to protect yourself. We watch for positions to decline 8% off their recent high or below their 200-day moving average.

TraderMark has identified the ten hottest commodities for the year and their corresponding ETFs (although in some cases, be aware that there’s more than one way to play these commodities). Be sure to understand which commodities hold what – some hold physical commodities, some hold futures and others hold the stock of companies involved in their production.

• Unleaded Gas, represented by the United States Gasoline Fund (UGA), up 68.3% year-to-date.
• Copper, which can be accessed through the PowerShares DB Base Metals Fund (DBB), 32.3% year-to-date
• Crude Oil, represented by the PowerShares Dynamic Oil Services (PXJ), up 23.2% year-to-date
• Orange Juice, which can be exposed through the Market Vectors Agribusiness (MOO), up 24.5% year-to-date
• Silver, which is represented by the iShares Silver Trust (SLV), up 23.3% year-to-date
• Sugar, which is seen in the  iPath DJ AIG Sugar (SGG) up 32% year-to-date
• Coffee which can be accessed through the iPath DJ AIG Coffee (JO), up 6.4% year-to-date
• Soybeans, which comprises 25% of the assets of the  PowerShares DB Agriculture (DBA) is down 0.4% year-to-date; exposure to both corn and wheat, two of the nation’s largest commodities can be accessed through DBA as well
• Heating Oil, which can be exposed through the United States Heating Oil Fund (UHN), up 22.2% year-to-date
• Nickel, which is represented through the iPath DJ AIG Nikel (JJN) up 31.5% year-to-date.

For more stories on commodities, visit our commodities category.

Kevin Grewal contributed to this article.