The Triple X Energy Strategy

The Power Move in Energy Markets

The oil and gas sector is an intriguing investment opportunity due to recent political shifts and technological advancements. With Donald Trump's return to office, there's an expected move towards deregulation and increased U.S. production, potentially lowering oil prices while boosting industry activity. New sanctions on Russia might tighten global supply, favoring companies with diversified production.

Despite the global push for renewables, oil and gas remain vital for transportation and petrochemicals, with demand at record highs. This, combined with the sector's current under-ownership, hints at potential price increases and investment opportunities. This blend of high demand, innovation, and strategic environmental considerations makes the oil and gas sector worth a closer look for both short-term gains and long-term investment strategy.

The Triple X Energy Strategy for the ProShares Ultra Oil & Gas (DIG) uses time-tested quantitative factors to determine when to be long the ETF or in cash. The strategy's approach to buying and selling is methodical:

  • Buy Side Indicator: Utilizes Money Flow Index and short-term price momentum

  • Sell Side Indicator: Employs a trading-volume look back.

The buy-side indicator focuses on the Money Flow Index and short-term price momentum. This means traders look at how much money is moving in and out of a stock and whether its price is rising quickly. If both factors show strength, it signals a good opportunity to buy before prices increase further. The sell-side indicator, on the other hand, analyzes trading volume over time. By looking at past trends, traders can spot when activity starts to slow down, which often means prices might drop soon. Selling at the right moment helps lock in profits before the stock loses value. Together, these strategies improve decision-making and increase the chances of success in the market.

A Word About the ProShares Ultra Oil & Gas (symbol = DIG)

This ProShares ETF seeks daily investment results that correspond, before fees and expenses, to 2x the daily performance of its underlying benchmark (the “Daily Target”). While the Fund has a daily investment objective, you may hold Fund shares for longer than one day if you believe it is consistent with your goals and risk tolerance. For any holding period other than a day, your return may be higher or lower than the Daily Target. These differences may be significant. Smaller index gains/losses and higher index volatility contribute to returns worse than the Daily Target. Larger index gains/losses and lower index volatility contribute to returns better than the Daily Target.

Index Information

The S&P Energy Select Sector Index is designed to measure the performance of energy companies included in the S&P 500 Index. The Index represents the energy sector of the S&P 500 Index ("S&P 500"). The Index includes equity securities of companies from the following Global Industry Classification Standard (GICS®) industries: energy equipment & services and oil & gas consumable fuels.