Stay alert to new energy commodity exchange traded funds (ETFs). An interesting correlation seems to exist between energy commodities and the major index S&P 500 that Fred Fuld for Stockerblog mentioned Saturday. The theory is that when energy commodities go down or up one year, the S&P 500 goes down or up as well the following year. (For example, when energy commodities went up in 2002, the S&P 500 went up in 2003. When energy commodities went down in 2003, the S&P 500 went down in 2004.) As energy commodity ETFs, such as PowerShares DB Energy (DBE), have been up the first half this year, will SPDRs (SPY) be up next year?
There could be some interesting twists and turns to this, as DBE invests in futures contracts on energy commodities such as light, sweet crude oil; heating oil; gasoline and natural gas. That means contango and backwardation could affect DBE’s performance.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.