New regulatory actions in the futures-backed commodities market could pose problems for a variety of popular oil ETFs, including the largest one – United States Oil (NYSEArca: USO), writes Don Dion for TheStreet. Other futures-backed oil ETFs that may be affected by position limits include iPath S&P GSCI Crude Oil Ttl Ret Idx ETN (NYSEArca: OIL) and United States 12 Month Oil (NYSEArca: USL). (What does the future hold?).

In the beginning of the year, the CFTC made inquiries about the impact of USO’s impact on the oil market after prices rushed to a record $147.27 in July 2008 before plummeting to near $30 months later. The providers of USO responded by expanding the period in which it rolled its contracts and reducing its position in the underlying benchmark. USO escaped further notice as investor interest turned from oil to other investments, most notably  United States Natural Gas (NYSEArca: UNG).

Recent restructuring of PowerShares DB Commodity Index Tracking (NYSEArca: DBC) portends possible regulatory action that could result in size restrictions on all futures-based oil ETFs. DBC’s managers restructured its oil weightings and also included oil futures contracts traded in London to avoid CFTC restrictions. The managers of UNG have been turning to the over-the-counter swaps markets to get some exposure. We could see more of these types of things as regulations come forward. (What are swaps?)

Assets in long-only commodity ETFs don’t appear to have been dented by the increased regulatory oversight of futures-based funds. At the end of October, assets in the funds stood at nearly $65 billion – a 12% increase from August.

Dion suggests that novice traders steer clear of oil funds until regulatory revisions are set and those who purchase shares should keep the size of the investment in check. Another option to consider for investors leery of futures-based funds are ETFs that hold shares of oil companies. (How to invest in oil using ETFs).

When investing in oil or commodity ETFs, it is important to have a strategy in place. For a more detailed explanation of using a trend following strategy, take a look at The ETF Trend Following Playbook.

For more information on oil, visit our oil category.

Max Chen contributed to this article.

The Dow Jones Industrial Average finally crossed a milestone 10,000 points this month. Though the mark was greeted with cheers on the trading floor, it didn’t stay there for long, and ultimately closed the month below 10,000 and ended the month flat. The S&P 500 lost 2% and the Nasdaq fell 3.6%.

October was largely a month that saw a weakening dollar. This was to the benefit of commodity ETFs, including SPDR Gold Shares (NYSE: GLD), which gained 3.7% for the month. United States Oil (NYSEArca: USO) gained 8.6%.

Earnings season was a largely encouraging one. The number of better-than-expected reports outnumbered the worse-than-expected ones by a ratio of about 6:1. But there are still big concerns about consumers: spending dropped 0.5% in September. As long as consumers aren’t spending, the recovery could be long and difficult.

To view our full performance report, click here.

For full disclosure, Tom Lydon’s clients own shares of GLD.

• Low interest rates. The great increase in global money supply has fueled oil-intensive growth and consequently, pushed up oil crude prices, comments Martin Hutchinson for Money Morning. Many countries have kept interest rates low, and they don’t expect to change it anytime soon. (More money being reinvested into commodities).

• More cars. China and India’s burgeoning auto industries are producing an expected 11 million and 2.5 million cars, respectively, while Brazil’s auto sales surged 20% in September. This translates into increased demand for oil.

• Weak U.S. dollar. The price of oil and the dollar historically have an inverse correlation; oil is priced in dollars, so as it weakens, oil becomes cheaper for foreigners. As the U.S. government takes on more debt, investors are predicting a further depreciation of the dollar. (Oil trading without the dollar)

• The economy. Some believe the worst is over, and oil will soon benefit from a more active economy with higher energy consumption, remarks Dave Mock for The Motley Fool.

• Scarcity. Oil bulls argue about a “peak oil,” where the peak of global oil production will finally be seen. Oil, like other commodities, is a finite resource.

There are several ways to play oil. Some ETFs hold shares of major oil companies, such as Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX). These companies range from oil exploration, to refining, to production. Examples include:

• PowerShares Dynamic Energy (NYSEArca: PXI): up 32% year-to-date

• SPDR S&P Oil & Gas Exploration & Production (NYSEArca: XOP): up 32.5% year-to-date

There are also oil ETFs that hold futures contracts. ETFs that hold futures give investors the chance to capitalize on oil prices without having to worry about rolling over contracts or taking delivery. For more information on oil, visit our oil category.

• United States Oil (NYSEArca: USO): up 19.2% year-to-date

• PowerShares DB Oil (NYSEArca: DBO): up 40.2% year-to-date

Max Chen contributed to this article.

Among the key earnings news today:

• Gannett (NYSE: GCI), the publisher of USA Today, managed to post a profit even as revenue fell
• Toy-maker Hasbro’s (HAS) income also rose amid cost-cutting by the company
• After the market closes today, tech giants Apple (Nasdaq: AAPL) and Texas Instruments (NYSE: TXN) will report earnings
• Caterpillar (NYSE: CAT) will report earnings on Tuesday

Oil’s price continued to rise, inching above $79 a barrel before stepping back. Investors are watching earnings reports for any signs that consumers are feeling confident again, reports Pablo Gorondi for the Associated Press. United States Oil Fund (NYSEArca: USO) is trading flat this morning. (Where is gas going next?)

Demand for Treasuries has stayed strong, even though the budget deficit now well past the $1 trillion mark, the government has sold a record amount of debt and the dollar hasn’t been this weak since August 2008. (Why you should watch Treasury ETFs).

Foreign buyers have stepped up their holdings to a record $3.5 trillion. Demand in the United States has been kept afloat by a rising savings rate and lingering worries that the market’s rally is overdone, report Liz Capo McCormick and Daniel Kruger for Bloomberg. iShares Barclays 7-10 Year Treasury (NYSEArca: IEF) is trading flat so far today.

A slew of big names and bellwether companies are reporting third-quarter earnings this week, including:  Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Citigroup (NYSE: C), Google (Nasdaq: GOOG), Goldman Sachs (NYSE: GS) and General Electric (NYSE: GE).

Thanks to economic optimism, crude oil prices jumped more than 2% this morning, hitting a six-week high. Cold weather across the United States and a weakening dollar are also feeding the increased demand, reports Reuters. At one point, prices hit $73.84, the highest since Aug. 25. United States Oil (NYSEArca: USO) is up about 1.25% this morning.

A discouraging report about jobs emerged this morning: economists think that the 7.2 million jobs lost in the course of the recession won’t fully return until 2012, or later. Fewer than 8% of the 44 economists surveyed think that jobs will return soon than that, reports Greg Robb for MarketWatch. But there was much better news out of the report: 80% of economists believe that the recession is finally over.

Other thoughts the economists had include:

• Real GDP is expected to grow at a pace of 2.9% in the second half of this year and at 3% next year
• Unemployment will rise to 10% in the first quarter of 2009 before dipping back to 9.5% by the end of the year
• The Federal Reserve, economists believe, will keep interest rates at record lows until later next spring

For more stories about oil, visit our oil category.

While investors aren’t heading for the exits, talk of a potential correction persists. But if you’re in the markets now, you have participated in the rally. (And if you’re not in, read about rebuilding your portfolio here). And like most investors, you probably want to protect those gains, not lose them.

Jeff Cox for CNBC has seven ideas on how to keep your gains safe, and we’ve thrown in some of our own, as well:

1. Emerging/Overseas Markets: Investors are moving away from a solely domestic portfolio, and moving assets overseas to cultivate diversity and keep exposure to foreign markets. By remaining quick and conservative, the markets such as China or Russia can help spread out the risk. Read about their economies here).

• iShares MSCI Emerging Markets (NYSEArca: EEM)

2. Energy: This sector remains to be a mainstay within a portfolio, as crude prices will stay low in the near term but could go significantly higher when supply becomes an issue again. Find out what may happen with oil prices here).

• United States Oil (NYSEArca: USO)

3. Choose ETFs: While some market pros now are cautioning against playing the entire market and suggest choosing single stocks instead, consider ETFs. Choosing a winning stock in a sector can be a daunting challenge, while an ETF can give you instant exposure while spreading out the risk.

4. Play Defense: Security can be found in names that traditionally provide security while the market looks for further direction. Consider what’s happening in consumer staples: consumers are staying at home, cooking more meals in and buying those old familiar name brands.

5. Gold: Gold prices have risen along with the stock market and economic indicators, indicating that investors want some downside protection should the rally fade. This has pushed the price of gold to new records. Can the rally go on? Read about it here.

• SPDR Gold Shares (NYSEArca: GLD)

6. Homebuilders: This beaten-down sector is poised to go higher, however, supply has a lot to do with it. While there have been a slew of factors cited—leveling in prices, low mortgage rates, government intervention—supply and demand will be the key in a true recovery for this sector.

• SPDR Homebuilders (NYSEArca: XHB)

7. Technology: Consumer electronics was the 11th strongest sector in the third quarter, up 44%. Some believe that this sector will continue to move higher.

• Vanguard Information Technology (NYSEArca:VGT)

8. Have an exit strategy. We use the 200-day moving average as a guide for when to get in and when to be out of the markets. For more ideas about trend following and creating a defensive strategy, check out the The ETF Trend Following Playbook, on shelves now.

For more stories about portfolio protection, visit our trend following category.

Advocates want to want to shift oil trade to a basket of currencies as opposed to just the dollar because of the weakness of the greenback. They realize that this measure will take very broad backing, states David Lawer of Reuters. Oil-rich nations, such as Iran, have reaped billions of dollars of profits and averted losses by shifting reserves to the euro and other currencies from the dollar.

If the move where to happen, some believe that the delinking of the dollar and oil would actually stabilize crude prices, giving more currencies to bounce along beside each another, states Robert Fisk in a Public Radio interview.

But the move would be challenging. Opponents say it just doesn’t make sense, because it would be complicated and expensive task to coordinate a collective move to another currency basket for crude.  Additionally, there are political obstacles that will need to be overcome for the switch to happen.

Two ETFs that are being affected and will most likely to continue to be affected by this news are:

• The United States Oil Fund (NYSEArca: USO): up 10.4% year-to-date

• The PowerShares DB USD Index Bullish (NYSEArca: UUP): down 8.2% year-to-date

For more stories on the dollar, visit our dollar category.

Kevin Grewal contributed to this article.

The weaker dollar is giving oil prices a lift. The commodity has surged above $71 a barrel. A weaker dollar makes oil cheaper for overseas buyers, since it’s priced in dollars. The United States Oil Fund (NYSEArca: USO) is up more than 1.5%.

Gold prices are also climbing even higher, now hitting a record $1,038 an ounce thanks to dollar weakness and fears of inflation, reports Bloomberg. The previous record was $1,033.90 an ounce, set in March 2008. SPDR Gold Shares (NYSEArca: GLD) is up more than 2% this morning.

Meanwhile, the dollar continues its downward slide, thanks to an interest-rate hike by the Bank of Australia. The move is the first tightening by a major central bank since the global downturn began, reports Peter A. McKay for The Wall Street  Journal. The move pushed the dollar to a 14-year low. A weak dollar can be played with the PowerShares DB U.S. Dollar Bearish (NYSEArca: UDN), which is up nearly 1% this morning.

For more stories on gold and oil, visit our gold and oil categories.

The national unemployment rate has jumped to 9.8%. The rising numbers are putting pressure on Congress to give additional unemployment benefits, as well as extend some programs that were scheduled to expire by the end of the year, reports Jack Healey for The New York Times.

The news about jobs sent oil prices lower, to $69.68 a barrel. The jobless numbers are fueling doubts about the economic recovery and its strength. United States Oil (NYSEArca: USO) was trading more than 1% lower this morning.

Factory orders declined unexpectedly in August by the largest amount in five months, reports Martin Crutsinger for the Associated Press. Demand dropped by 0.8%, worse than the 0.7% gain economists had expected. The drop was in part because of declining commercial aircraft demand.

Bank of America has given the go-ahead for a dividend payment of $713 million on preferred stock issued to the Treasury Department. The deal was part of the government’s bank rescue program last year, reports the Associated Press. PowerShares Financial Preferred (NYSEArca: PGF) is down more than 1.25% this morning.

For more stories on energy, visit our energy category.

Oil today is trading above the $67 a barrel mark on a resumption of weakness in the U.S. dollar, reports Ikuko Kurahone for Reuters. Oil prices are going to be closely watched in the coming weeks and months as investors watch for both signs of inflation and a signal as to where the greenback could be headed.

United States Commodity Funds, the same provider of that natural gas ETF you’ve been hearing so much about, recently launched the United States Short Oil Fund (NYSEArca: DNO), with an expense ratio of 0.6%, reports Don Dion for TheStreet. DNO is an inverse ETF product that will try to reflect percentage changes of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, as tracked by price changes of the benchmark futures contract in the New York Mercantile Exchange.

Potential investors should note that commodity futures are volatile, and the fund is more speculative and includes a higher degree of risk.

The fund may eventually be subject to new regulatory changes imposed by the Commodity Futures Trading Commission (CFTC) that are expected to be announced this fall. DNO will likely face creation limits, which could curtail the fund if it attracts too much investor demand. So far, the new ETF has attracted a strong showing of investor interest.

DNO should reflect the returns of the United States Crude Oil Fund (NYSEArca: USO) on a one-day basis, but the returns may diverge over the long-term because of compounding, according to IndexUniverse.

The new ETF’s main competitor is the PowerShares DB Crude Oil Short ETN (NYSEArca: SZO). SZO differs in that it owns out-month contracts instead of DNO’s front-month futures contract. SZO compounds its returns on a monthly basis.

For more stories on oil, visit our oil category.

Max Chen contributed to this article.