Direxion Daily Energy Bear 2X Shares (ARCA: ERY)

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The fund invests in swap agreements, futures contracts, short positions or other financial instruments that, in combination, provide inverse or short leveraged exposure to the index equal to at least 80% of the funds net assets (plus borrowing for investment purposes). The index is provided by S&P Dow Jones Indices and includes domestic companies from the energy sector which includes the following industries: oil, gas and consumable fuels; and energy equipment and services. It is non-diversified.

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Direxion Daily Energy Bear 2X Shares

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DIREXION DAILY ENERGY BEAR 2X ETF

Direxion Managing Director Ed Egilinsky spoke to Benzinga about the sectors likely to benefit from the Federal Reserve&#8217;s potential rate cuts as well as the <a href="https://www.benzinga.com/topic/2024-presidential-election">2024 presidential election</a>.
&#8220;In the current rotation trade environment, there are several sectors that could be impacted such as the Financials, Energy, Tech, and Healthcare/Biotech,&#8221; Egilinsky said. 
<h3 class="wp-block-heading">Semiconductors &#8211; Driving The Tech Sector</h3>
Egilinsky emphasized the significant role of semiconductors in the tech sector's recent success. 
&#8220;The tech sector has continued to be a leader in 2024, with semiconductors once again outpacing the broader tech space,&#8221; he said. This trend is partly due to the excitement surrounding AI.
For traders looking to leverage this momentum, Egilinsky said, &#8220;We have seen inflows YTD with both our Direxion Daily Semiconductor Bull 3x Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SOXL#NYSE">SOXL</a>) and Direxion Daily Semiconductor Bear 3x Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SOXS#NYSE">SOXS</a>), as traders contemplate the next directional move.&#8221; 
These ETFs are designed to capture short-term fluctuations in the semiconductor sector, offering investors tools to capitalize on its ongoing growth.
<h3 class="wp-block-heading">Sector Sensitivity Amid Political, Economic Shifts</h3>
With Election Day on Nov. 5, Egilinsky highlighted how policy changes could affect various sectors in 2025.
&#8220;The election outcome could have a major impact on policy and should create directional volatility in areas sensitive to policy shifts such as healthcare/biotech, financials, and energy,&#8221; he explained. 
Leveraged and inverse ETFs are poised to see increased activity depending on these policy changes:
<ul>
<li>Direxion Daily S&amp;P Biotech Bull 3X Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LABU#NYSE">LABU</a>) and Direxion Daily S&amp;P Biotech Bear 3X Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LABD#NYSE">LABD</a>),</li>
<li>Direxion Energy Bull 2X Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ERX#NYSE">ERX</a>) and Direxion Daily Energy Bear 2X Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ERY#NYSE">ERY</a>)</li>
<li>Direxion Financial Bull 3X Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FAS#NYSE">FAS</a>) and Direxion Financial Bear 3X Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FAZ#NYSE">FAZ</a>) </li>
</ul>
Read Also: <a href="EXCLUSIVE: Which Magnificent 7 Stock Would Investors Put $1,000 In Today? 44% Of Benzinga Readers Pick This Company">EXCLUSIVE: Which Magnificent 7 Stock Would Investors Put $1,000 In Today? 44% Of Benzinga Readers Pick This Company</a>
<h3 class="wp-block-heading">Diversifying Beyond The Magnificent Seven</h3>
Egilinsky also discussed the challenge of diversifying beyond the top-performing Magnificent Seven stocks: Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), Amazon.com Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>), Alphabet Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>) (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOGL#NASDAQ">GOOGL</a>), Meta Platforms Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>), Microsoft Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>), Tesla Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>), and Nvidia Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>).
&#8220;We see many investors looking to diversify beyond the Magnificent Seven stocks,&#8221; he said. For those seeking broader exposure, the Direxion NASDAQ-100 Equal Weighted Index Shares (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQE#NASDAQ">QQQE</a>) offers an equal weight approach to the NASDAQ 100 Index, potentially providing additional sources of returns.
<h3 class="wp-block-heading">Real Estate, Utilities: Benefiting From Rate Cut Expectations</h3>
Egilinsky also noted the performance of real estate and utilities in light of anticipated rate cuts. 
&#8220;The Real Estate and Utilities markets recently hit two-year highs as the realization that the Fed will start cutting interest rates has helped both sectors be amongst the best-performing sectors thus far this quarter,&#8221; he said.
For investors looking to ride this momentum, ETFs like the Direxion Daily Utilities Bull 3X Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UTSL#NYSE">UTSL</a>) and Direxion Daily Real Estate Bull 3X Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DRN#NYSE">DRN</a>) are worth considering.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/markets/24/08/40635736/how-americas-home-market-could-change-for-the-better-if-more-buyers-followed-charlie-mungers-lead">How America&#8217;s Home Market Could Change For The Better If More Buyers Followed Charlie Munger&#8217;s Lead</a></li>
</ul>
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EXCLUSIVE: Beyond The Magnificent Seven — Direxion's Egilinsky Reveals Top Sector Picks

Direxion Energy Bear 2X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>) opened slightly lower on Tuesday, in contrast to stock futures, which were flat.
Occidental Petroleum Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/oxy#NYSE">OXY</a>) printed a <a href="https://www.benzinga.com/news/earnings/23/02/31078152/whats-going-on-with-occidental-petroleum-stock-after-hours">fourth-quarter earnings miss</a> on Monday after the market close but on Tuesday, the stock was trading higher. If Occidental begins to sell off later on Tuesday, the energy sector could begin to slide in tandem, which could boost ERY higher.
ERY is a double-leveraged <a href="https://www.direxion.com/product/daily-energy-bull-bear-2x-etfs">fund</a> that is designed to inversely outperform companies held in the S&amp;P Energy Select Sector Index by 200%. The index includes a variety of energy-related stocks, with two giants, Exxon Mobil Corp&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xom#NYSE">XOM</a>) and Chevron Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cvx#NYSE">CVX</a>) making up 43.04% of its weighted holdings.
A few other top 10 names in the ETF include EOG Resources&nbsp;Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/eog#NYSE">EOG</a>), weighted at 4.49%;&nbsp;ConocoPhillips (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cop#NYSE">COP</a>), weighted at 4.52% and Schlumberger NV&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/slb#NYSE">SLB</a>), which is weighted at 4.80% within the ETF.
It should be noted&nbsp;leveraged ETFs are meant to be used as a trading vehicle as opposed to long-term investment.
For traders who believe there is less risk and more reward to play the energy sector as a bull, Direxion Energy Bull 2X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/erx#NYSE">ERX</a>) is one option.
Want direct analysis? Find me in the BZ Pro lounge! <a href="https://benzinga.grsm.io/1ih7p9hphj9p">Click here for a free trial</a>.
The ERY Chart: ERY reversed course into an uptrend on Jan. 27 and has made a series of higher highs and higher lows. The most recent higher high was formed on Feb. 22 at $32.03 and the most recent higher low was printed at the $26.80 mark on Feb. 14.
<ul>
<li>If ERY moves higher over the next few days, Tuesday&rsquo;s low-of-day could serve as the next higher low within the pattern. If that&rsquo;s the case, ERY is likely to form another higher high in the future.</li>
<li>ERY could be settling into a bull flag pattern, with the pole formed between Feb. 14 and Feb. 22 and the flag forming over the days that have followed. If the pattern is recognized and ERY breaks up from the bull flag on higher-than-average volume, the measured move is about 20%, which suggests the ETF could rise up toward $35.</li>
<li>Traders who are bullish on the energy sector and bearish on ERY want to see the ETF close under the 50-day simple moving average, which would negate the uptrend and the bear flag.</li>
<li>ERY has resistance above at $33.22 and $37.27 and support below at $30.16 and $25.78.</li>
</ul>
<img alt="screenshot_2214.png" src="https://www.benzinga.com/files/u278075/screenshot_2214.png" style="height:427px; width:760px" />
Read Next:&nbsp;<a href="https://www.benzinga.com/trading-ideas/long-ideas/23/02/31073573/spy-gaps-higher-ahead-of-retail-earnings-but-looks-bearish-longer-term-why-this-3x-lever">SPY Gaps Higher Ahead Of Retail Earnings But Looks Bearish Longer-Term</a>
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Looking To Play Exxon, OXY To The Downside? This Inverse Energy ETF Has 2X Leverage

Direxion Energy Bull 2X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/erx#NYSE">ERX</a>) was trading slightly lower in consolidation on Tuesday, after momentum within an uptrend caused the ETF to rally over 14% between Oct. 19 and Monday.
The energy sector has been enjoying a recent bull cycle, which began on Sept. 26 when Exxon Mobil Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xom#NYSE">XOM</a>) bounced up off the 200-day simple moving average and reversed course into an uptrend.
<a href="https://www.bing.com/search?q=how+to+buy+XOM+benzinga&amp;cvid=263687cdbc6740739803944ba4c818ec&amp;aqs=edge..69i57j0l2j69i64.6172j0j4&amp;FORM=ANAB01&amp;PC=U531">Exxon</a> was also consolidating on Tuesday, perhaps in preparation for a move before or after the oil and gas giant reports quarterly earnings on Friday.
See Also: <a href="https://www.benzinga.com/news/earnings/22/10/29404821/how-to-trade-alphabet-googl-stock-before-and-after-q3-earnings">How To Trade Alphabet Stock Before And After Q3 Earnings</a>
ERX, a double-leveraged fund designed to outperform companies held in the S&amp;P Energy Select Sector Index by 200%, includes a variety of energy-related stocks. A few of the top 10 <a href="https://www.direxion.com/product/daily-energy-bull-bear-2x-etfs">names</a> in the ETF include:
<ul>
<li>Exxon and Chevron Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cvx#NYSE">CVX</a>), more than 31% of its weighted holdings.</li>
<li>EOG Resources, Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/eog#NYSE">EOG</a>), weighted at 3.25%</li>
<li>ConocoPhillips (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cop#NYSE">COP</a>), weighted at 3.33%</li>
<li>Schlumberger N.V. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/slb#NYSE">SLB</a>), weighted at 3.83%.</li>
</ul>
It&#39;s worth noting that leveraged ETFs are meant to be used as a trading vehicle as opposed to long-term investments.
Traders wishing to play the energy sector to the downside may&nbsp;consider the inverse ETF:&nbsp;Direxion Energy Bear&nbsp;2X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>).
<a href="http://benzinga.grsm.io/1ih7p9hphj9p">Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial</a>.
The ERX Chart: ERX was trading in an inside bar pattern Tuesday, with all of the price action taking place within Monday&rsquo;s range. The inside bar leans bullish in this case because ERX was trading higher before forming the pattern.
<ul>
<li>Traders can watch for a breakup or down from Monday&rsquo;s mother bar on higher-than-average volume later on Tuesday or on Wednesday to gauge the future direction. If the ETF breaks up bullishly from the mother bar, a gap that exists between $69.23 and $70.80 is likely to fill.</li>
<li>The inside bar on ERX could also be the beginning of a flag formation and paired with the four-day rise beginning Oct. 19, the ETF could be settling into a bull flag pattern on the daily chart. If the pattern becomes recognized, the measured move is about 15%, which indicates ERX could soar up toward $75.</li>
<li>ERX has resistance above at $68.55 at $72.15 and supports below at $63.47 and $59.07.</li>
</ul>
<img alt="erx_oct._25.png" src="https://www.benzinga.com/files/u278075/erx_oct._25.png" style="height:427px; width:760px" />See Also:&nbsp;<a href="https://www.benzinga.com/news/22/06/27688327/if-you-invested-1-000-in-exxon-mobil-when-joe-biden-was-elected-president-heres-how-much-youd-have-1">If You Invested $1,000 In Exxon Mobil When Joe Biden Was Elected President, Here&#39;s How Much You&#39;d Have Now</a>

Sector ETFs

Want To Play The Energy Sector Bullish Into Exxon Earnings? This ETF Offers 2X Returns

Direxion Energy Bear&nbsp;2X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>) was trading flat on Friday after a four-day decline saw the ETF retrace 11% off the Sept. 26 high of $51.45.
The energy sector had been enjoying a long bull cycle,&nbsp;which&nbsp;began on Dec. 31 2021 and gained steam in February following Russia&rsquo;s invasion of Ukraine and the oil embargoes that followed. The cycle ended on June 8, when Exxon Mobil Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xom#NYSE">XOM</a>)&nbsp;topped out at the $105.57 mark causing ERY to begin trading higher, although the road for the ETF has been rocky.
ERY is a double leveraged <a href="https://www.direxion.com/energy">fund</a> designed to inversely outperform companies held in the S&amp;P Energy Select Sector Index by 200%. The index includes a variety of energy-related stocks, with two giants, Exxon&nbsp;and Chevron Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cvx#NYSE">CVX</a>) making up 45% of its weighted holdings.
A few other top 10 names in the ETF include EOG Resources Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/eog#NYSE">EOG</a>), weighted at 4.23%, ConocoPhillips (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cop#NYSE">COP</a>), weighted at 3.59% and Schlumberger NV&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/slb#NYSE">SLB</a>), which is weighted at 3.44% within the ETF.
It should be noted that leveraged ETFs are meant to be used as a trading vehicle as opposed to a long-term investment.
For traders who believe there is less risk and more reward to play the energy sector as a bull, Direxion Energy Bull 2X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/erx#NYSE">ERX</a>)&nbsp;is one option.
Want direct analysis? Find me in the BZ Pro lounge! <a href="https://benzinga.grsm.io/1ih7p9hphj9p">Click here</a> for a free trial.
The ERY Chart: ERY may be forming into a bull flag pattern on the daily chart, with the pole formed between Sept. 14 and Sept. 26 and the flag being created over the days that have followed. Conversely, ERX (the bull Energy ETF) is forming a bear flag.
<ul>
<li>If the bull flag on ERY becomes recognized, the measured move is about 40%, which indicates the ETF could soar up toward $64. If ERY begins to break up from the top descending trendline of the flag formation, it is likely to correlate with a bearish move in energy names.</li>
<li>ERY is also trading in an uptrend pattern, with the most recent higher high formed on Sept. 26 and $46.30 and the most recent confirmed higher low printed at the $39.77 level on Sept. 21. If ERY breaks up from the bull flag pattern, Wednesday&rsquo;s low-of-day at $45.21 will mark the next higher low.</li>
<li>ERY has resistance above at $46.30 and $51.75 and support below at $42.35 and $37.27.</li>
</ul>
<img alt="ery_sept._30.png" src="https://www.benzinga.com/files/u278075/ery_sept._30.png" style="height:427px; width:760px" />See Also:&nbsp;<a href="https://www.benzinga.com/general/education/22/09/29061517/if-you-invested-1-000-in-exxon-mobil-xom-stock-at-its-covid-19-pandemic-low-heres-how-much-youd">If You Invested $1,000 In Exxon Mobil Stock At Its COVID-19 Pandemic Low, Here&#39;s How Much You&#39;d Have Now</a> 
Photo: Shutterstock

Bearish On Exxon, Chevron? This Inverse ETF Tracks The Energy Sector

Direxion Energy Bull 2X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/erx#NYSE">ERX</a>) gapped down 10.42% to start the trading day on Wednesday. The ETF was erasing some of its losses in the afternoon, trading&nbsp;about 8% lower.
The energy sector had been enjoying a long bull cycle that began&nbsp;Dec. 31, 2021 and gained steam in February following Russia&rsquo;s invasion of Ukraine and the oil embargoes that followed. The cycle ended on June 8 when Exxon topped out at the $105.57 mark, causing ERX begin to plummet from its 52-week high of $80.27.
ERX is a <a href="https://www.direxion.com/product/daily-energy-bull-bear-2x-etfs">double leveraged fund</a> that is designed to outperform companies held in the S&amp;P Energy Select Sector Index by 200%. The index includes a variety of energy related stocks, with two giants, Exxon Mobil Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xom#NYSE">XOM</a>) and Chevron Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cvx#NYSE">CVX</a>), making up 43.78% of its weighted holdings.
A few other top 10 names in the ETF include EOG Resources, Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/eog#NYSE">EOG</a>), weighted at 4.78%;&nbsp;ConocoPhillips (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cop#NYSE">COP</a>), weighted at 4.56%; and Schlumberger N.V. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/slb#NYSE">SLB</a>), which is weighted at 4.39% within the ETF.
It should be noted that leveraged ETFs are meant to be used as a trading vehicle as opposed to a long-term investment.
Want direct analysis? Find me in the BZ Pro lounge! <a href="https://benzinga.grsm.io/1ih7p9hphj9p">Click here</a> for a free trial.
The ERX Chart: ERX has been trading in a downtrend since June 8, with the most recent lower low formed on June 17 at $47.93 and the most recent lower high created at the $54.96 mark on the day that followed.
On Wednesday, ERX fell near to the last lower low and bounced up from the level, which formed a possible bullish double bottom pattern on the ETF&rsquo;s chart.
<ul>
<li>Although ERX is trading in a downtrend, the double bottom pattern may cause the ETF to form a more substantial bounce over the coming days, but other bearish signals may prove dominant.&nbsp;</li>
<li>Despite the double bottom pattern, ERX is trading in a bearish double inside bar pattern, with all of Tuesday and Wednesday&rsquo;s price action taking place within Friday&rsquo;s trading range. The double inside bar leans bearish because ERX was trading lower before forming the pattern.</li>
<li>If ERX suffers a bearish reaction to the inside bar pattern on Thursday, traders can expect another bounce&nbsp;over the next few days to at least form another lower high.</li>
<li>A&nbsp;move lower will drop the ETF&rsquo;s relative strength index (RSI) into oversold territory. ERX&rsquo;s RSI is measuring in at about 34%.</li>
<li>For traders who believe there is less risk and more reward to play the energy sector as a bear, Direxion Energy Bear 2X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>) is one option.</li>
<li>ERX has resistance above at $54.74 and $59.07 and support below at $50.10 and $47.25.</li>
</ul>
<img alt="erx_june_22.png" src="https://www.benzinga.com/files/u278075/erx_june_22.png" style="height:427px; width:760px" />See Also:&nbsp;<a href="https://www.benzinga.com/trading-ideas/movers/22/06/27814831/whats-going-on-with-exxon-mobil-marathon-oil-bp-and-shell-shares-today">What&#39;s Going On With Exxon Mobil, Marathon Oil, BP And Shell Shares Today?</a>
Photo via Shutterstock.&nbsp;

Movers

As Exxon, Chevron Continue To Plunge, Here's A Look At The Direxion Energy Bull 2X Shares ETF Chart

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Stock Split

Direxion Daily Energy Bear 2X Shares Trading Following Effect of 1:10 Reverse Stock Split

There are energy ETFs that are good tools for both professional and retail traders. Two of them are the Direxion Daily Energy Bull 2x Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/erx#NYSE">ERX</a>) ETF and the Direxion Daily Energy Bear 2x Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>) ETF.
These ETFs track the index that is composed of various energy commodities. They also use leverage.
ERX is designed to move twice as much as the index does. For example, if the index gains 1%,&nbsp;ERX should be up about 2%.
Conversely, ERY is designed to move twice inversely or opposite what the index does. This is used by traders who think the index is going lower. If the index falls by 1%, ERY should be up about 2%.
It&rsquo;s a great time to be a commodities trader. The recent volatility in oil has led to huge profits for some. These two ETFs can be valuable tools to gain exposure to the energy industry.
To learn more about ETFs join the <a href="https://www.benzinga.com/premium/ideas/benzinga-trading-school/?utm_source=topnav&amp;utm_medium=topnav">Benzinga Trading School</a>.
Direxion Daily Energy Bull 2X Shares ETF (ERX)
<img alt="erx.png" src="https://www.benzinga.com/files/u344550/erx.png" style="height:313px; width:640px" />
Direxion Daily Energy Bear 2X Shares ETF (ERY)
<img alt="ery.png" src="https://www.benzinga.com/files/u344550/ery.png" style="height:400px; width:640px" />

2 Energy ETFs For Professional And Retail Traders

The following post was written and/or published as a collaboration between Benzinga&rsquo;s in-house sponsored content team and a financial partner of Benzinga.
It&#39;s already been a banner year for bearish oil bets with crude ranking as one of 2020&#39;s worst-performing commodities, but more could be on the way for oil shorts with it now clear Joe Biden will be the 46th president of the United States.
<h3>What Happened</h3>
The Direxion Daily Energy Bear 2X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>) is an idea for aggressive traders looking to capitalize on weakness in energy equities. ERY attempts to deliver double <a href="https://www.direxion.com/product/daily-energy-bull-bear-2x-etfs">the daily inverse returns</a> of the Energy Select Sector Index.
ERY&#39;s recent price action suggests it is a fine way of profiting from Biden&#39;s energy policy, which is largely expected to favor renewables producers. Over the past month, the bearish ERY is higher by almost 14%.
<h3>Why It&#39;s Important</h3>
Multiple factors point to potential near-term upside for the double-leveraged, inverse ERY.
&ldquo;A Biden presidency means the return of Iranian crude (i.e., 1 to 1.8 mm/bpd) to global markets toward the end of 2021,&rdquo; said Rareview Macro founder <a href="https://www.rareviewmacro.com/">Neil Azous in a recent note</a>.
Additionally, new supply from some members of the Organization of Petroleum Exporting Countries (OPEC) could be a drag on crude prices going forward.
&ldquo;The increase in Libya&rsquo;s crude production complicates OPEC+ balancing supply. Note, it was reported that Libyan oil production exceeded 1 million barrels per day last week,&rdquo; said Azous.
Underscoring how dire things are in the energy patch, shorting oil and/or being long ERY is an appealing idea despite some favorable Election Day news for the energy sector in states including Alaska, Louisiana and Texas &ndash; three of the largest energy producing regions in the country.
<h3>What&#39;s Next</h3>
Obviously, Inauguration Day is still more than two months away, so it remains to be seen how the Biden Administration handles the coronavirus pandemic and what the state of the pandemic is in late January.
However, oil could be vulnerable and ERY could be lucrative on the back of increasing lockdown speculation as the U.S. is averaging more than 100,000 cases per day.
&ldquo;Short-term COVID-related risk continues. Lockdowns and lack of mobility will become a more significant talking point in the US, affecting demand,&rdquo; said Azous. &ldquo;However, the swing vote that will kill the price is any COVID increase in Asia as supply/demand fears are currently contained in the US and Europe.&rdquo;
The preceding post was written and/or published as a collaboration between Benzinga&rsquo;s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.

Bearish Energy ETF Could Be Ready For Biden Bounce

The following post was written and/or published as a collaboration between Benzinga&rsquo;s in-house sponsored content team and a financial partner of Benzinga.
The good news for oil investors is that the price of a barrel of oil has stabilized around the $35-$40 area, a far cry from the brief foray into negative territory in April.&nbsp;
The bad news, well, everything else. Barring an unforeseen rally, 2020 will go down as the worst year for crude oil since 2014, and a recent analysis from the International Monetary Fund doesn&rsquo;t anticipate prices breaking this range over the next 12 months.&nbsp;
This bearish sentiment&mdash;the result of a supply gut, reduced global demand, and long-term shifts towards renewable energy&mdash;has benefitted the performance of two of Direxion&rsquo;s inverse energy funds, the <a href="https://www.direxion.com/product/daily-sp-oil-gas-exp-prod-bull-bear-2x-etfs?utm_source=Bezinga&amp;utm_medium=display&amp;utm_campaign=energyandpowerarticle&amp;utm_term=gush_drip&amp;utm_content=lev2020">Direxion Daily S&amp;P Oil &amp; Gas Exploration &amp; Production Bear 2x Shares </a>(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/drip#NYSE">DRIP</a>), which is up about 30% since the start of August, and the <a href="https://www.direxion.com/product/daily-energy-bull-bear-2x-etfs?utm_source=Bezinga&amp;utm_medium=display&amp;utm_campaign=energyandpowerarticle&amp;utm_term=erx_ery&amp;utm_content=lev2020">Direxion Daily Energy Bear 2X Shares </a>(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>)<a href="https://www.direxion.com/product/daily-energy-bull-bear-2x-etfs?utm_source=Bezinga&amp;utm_medium=display&amp;utm_campaign=energyandpowerarticle&amp;utm_term=erx_ery&amp;utm_content=lev2020">,</a> both Leveraged ETFs, which is higher by 40% in that same span.
Given the dim sentiment hanging over the future of oil, this trend may well continue through the rest of 2020 as the IMF predicts. However, with continued negotiations among OPEC nations and a national election coming up in the U.S., the landscape for crude is bound to experience further changes affecting not only the major oil concerns but the entire global energy landscape.
OPEC Litigates a Hazy Future for Oil
The current projection for crude demand is pretty dire, even among the characteristically bullish OPEC consortium. At a recent Energy Intelligence Forum, OPEC&rsquo;s Secretary General Mohammad Barkindo could only provide an assurance of price stability even as the organization lowered its growth projection for daily oil demand through 2030 to just 1.1 million barrels a day.
But even that estimate may be too generous. A recent energy outlook report from BP plc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/bp#NYSE">BP</a>) anticipates the world may have <a href="https://oilprice.com/Energy/Energy-General/BP-Oil-Demand-Growth-is-Dead.html">already passed peak oil</a>, a sentiment that hasn&rsquo;t done any favors for the company&rsquo;s stock price, which is at a more than 25 year low. If the company&rsquo;s projection is at all accurate, oil demand could be cut in half over the next 30 years.
The picture is similar for other oil expiration and production companies. Both Exxon Mobil Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xom#NYSE">XOM</a>) and Schlumberger Limited (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/slb#NYSE">SLB</a>) are trading near a 20-year low, while Marathon Oil Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mro#NYSE">MRO</a>) shares are closing on a 30-year low.&nbsp;
While there are a few oil companies that aren&rsquo;t setting quite such bearish records, like Valero Energy Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vlo#NYSE">VLO</a>) and Chevron Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cvx#NYSE">CVX</a>), none of the major energy concerns are on pace to exit 2020 in the green.
U.S. Energy Is the Wildcard
While the current projections for crude oil prices don&rsquo;t offer much hope for energy bulls, there may perhaps be one bright spot on the horizon: the upcoming U.S. election.&nbsp;
Current polling suggests 2020 may be a big year for the Democratic Party, which is looking to take both the White House and the U.S. Senate, adding to the party&rsquo;s majority control in the House of Representatives.&nbsp;
With that likelihood comes the distinct probability of a drastic change in U.S. energy policy from the current energy-friendly Trump administration. Should he prove the polls right, Democratic nominee Joe Biden has already indicated an intent to reinstate tighter fuel efficiency standards for automobiles as well as decreased reliance on natural gas. Additionally, Biden would likely reverse course on the current administration&rsquo;s pledge to expand off- and on-shore drilling within the nation&rsquo;s wildlife preserves while simultaneously pledging up to $1.7 billion over the next 10 years into renewable energy, a core priority of his campaign.
Although most of these plans have a longer time horizon, the possibility of lower U.S. energy production might be an encouraging cue for investors. Current readings from the U.S. Energy Information Agency show domestic energy inventories are historically high. The agency already anticipates a drawdown of this surplus through the winter months thanks to low prices and rising demand, and a Biden and/or Democratic Party win might spur greater speculation for higher-priced energy into the New Year&nbsp;
An Alternative Future
Of course, these short-term factors don&rsquo;t alter the larger trend away from fossil fuels and toward cleaner energy sources and renewable technologies. And while this doesn&rsquo;t bode well for oil, there are other areas of energy better suited to benefit from these trends.&nbsp;
Specifically, natural gas and utility companies. These companies have not suffered the same drop in demand as crude and have seen solid parity between inventories and demand, as evidenced by the resilience of the <a href="https://www.direxion.com/product/daily-utilities-bull-3x-etf?utm_source=Bezinga&amp;utm_medium=display&amp;utm_campaign=energyandpowerarticle&amp;utm_term=utsl&amp;utm_content=lev2020">Direxion Daily Utilities Bull 3X Shares</a> (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/utsl#NYSE">UTSL</a>) leveraged ETF. And while the possibility of stricter regulations on fracking could pose a challenge and skew the margins for natural gas firms, many of these companies have also expanded their energy portfolio to anticipate a shift in focus to renewables.
All told, the energy industry is in for significant changes through the next year regardless of where the global balance of power lies. Businesses and investors would do well to focus on these tide changes, lest they get swept under the changing energy landscape.
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate. An investor&rsquo;s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance quoted. Returns for performance for one year and under are cumulative, not annualized. Short term performance, in particular, is not a good indication of the fund&rsquo;s future performance, and an investment should not be made based solely on returns.
For Standardized Performance <a href="https://www.direxion.com/etfs?filter=dailybear1x_dailybullbear2x_dailybullbear3x">Click Here</a>
Leveraged and inverse ETFs pursue daily leveraged investment objectives which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying index over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments.
DRIP as of 09/30/2020
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ERY as of 09/30/2020
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UTSL as of 09/30/2020
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An investor should carefully consider a Fund&rsquo;s investment objective, risks, charges, and expenses before investing. A Fund&rsquo;s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund&rsquo;s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund&rsquo;s prospectus and summary prospectus should be read carefully before investing.
&nbsp;Market Disruptions Resulting from COVID-19.&nbsp;The outbreak of COVID-19 has negatively affected the worldwide economy, individual countries, individual companies and the market in general. The future impact of COVID-19 is currently unknown, and it may exacerbate other risks that apply to the Fund.
Shares of the Direxion Shares are bought and sold at market price (not NAV) and are not individually redeemed from a Fund. Market Price returns are based upon the midpoint of the bid/ask spread at 4:00 pm EST (when NAV is normally calculated) and do not represent the returns you would receive if you traded shares at other times. Brokerage commissions will reduce returns. Fund returns assume that dividends and capital gains distributions have been reinvested in the Fund at NAV. Some performance results reflect expense reimbursements or recoupments and fee waivers in effect during certain periods shown. Absent these reimbursements or recoupments and fee waivers, results would have been less favorable.
Direxion Shares Risks&nbsp;- An investment in the ETFs involves risk, including the possible loss of principal. The ETFs are non-diversified and include risks associated with concentration that results from an ETF&rsquo;s investments in a particular industry or sector which can increase volatility. The use of derivatives such as futures contracts and swaps are subject to market risks that may cause their price to fluctuate over time. The ETFs do not attempt to, and should not be expected to, provide returns which are a multiple of the return of their respective index for periods other than a single day. For other risks including leverage, correlation, daily compounding, market volatility and risks specific to an industry or sector, please read the prospectus.
Distributor: Foreside Fund Services, LLC.
Photo by <a href="https://unsplash.com/@zburival?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText">Zbynek Burival</a> on <a href="https://unsplash.com/s/photos/oil-and-gas?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText">Unsplash</a>
The preceding post was written and/or published as a collaboration between Benzinga&rsquo;s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.

General

DRIP

Energy And Power: Oil ETFs Provide Hints At The Global Energy Market's Troubles

The following post was written and/or published as a collaboration between Benzinga&rsquo;s in-house sponsored content team and a financial partner of Benzinga.
As has been widely documented, the traditional energy sector is struggling this year. This isn&#39;t the first time and, unfortunately for daring energy bulls, it won&#39;t be the last time.
<h3>What Happened</h3>
Traders looking for winning bets among energy exchange traded funds don&#39;t have to look far, but they do have to up their risk tolerance. All the Direxion Daily Energy Bear 2X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>) has done over the past month is jump more than 30%.
ERY looks to deliver <a href="https://www.direxion.com/product/daily-energy-bull-bear-2x-etfs">double the daily inverse returns</a> of the Energy Select Sector Index, a collection of battered old guard energy names, including former Dow component Exxon Mobil (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xom#NYSE">XOM</a>).
<h3>Why It&#39;s Important</h3>
Obviously, as a leveraged ETF, ERY isn&#39;t intended to be a long-term holding and traders shouldn&#39;t tempt fate by turning it into one. However, the cloudy long-term outlook for oil and gas consumption could make the bearish ERY a long-term winner.
In its recent energy outlook, which is widely followed throughout the industry, BP hints that 2019 may have been the peak year for global oil demand.
&ldquo;Demand for oil falls over the next 30 years,&rdquo; <a href="https://www.japantimes.co.jp/news/2020/09/14/business/bp-oil-demand-growth/">BP said in the report</a>. &ldquo;The scale and pace of this decline is driven by the increasing efficiency and electrification of road transportation.&rdquo;
The coronavirus pandemic is dramatically altering oil demand this year and with expectations in place that it could be 2022 or 2023 before air travel looks like it did last year and with electric vehicle sales soaring, BP is likely onto something when saying 2019 could be as good as it ever gets for global oil demand. 
That&#39;s all bad news for investors holding traditional energy stocks hoping for a rebound. Conversely, those scenarios open the door to more near-term bad news for oil and the related equities, meaning good news for the bearish ERY.
<h3>What&#39;s Next</h3>
For those looking for a near-term catalyst for ERY, well, you&#39;re in luck and that potential good fortune ties back to Exxon. That stock represents nearly 23% of the index ERY looks to deliver double the daily returns of.
With oil demand and prices slumping, it&#39;s <a href="https://www.benzinga.com/analyst-ratings/analyst-color/20/09/17453472/exxonmobil-may-need-15b-in-debt-to-support-dividend-says-mkm-partners">getting harder for Exxon</a> to sustain its dividend and some analysts are saying a cut could be announced before the end of this year or early next year. If that happens, it won&#39;t be a surprising move, but it would likely be a positive for ERY nonetheless.
The preceding post was written and/or published as a collaboration between Benzinga&rsquo;s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.

Cloudy Energy Outlook Means Sunny Skies For This ETF

The following post was written and/or published as a collaboration between Benzinga&rsquo;s in-house sponsored content team and a financial partner of Benzinga.
Dow components Exxon Mobil (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xom#NYSE">XOM</a>) and Chevron (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cvx#NYSE">CVX</a>) step into the earnings confessional today, potentially bringing with them increased activity for leveraged energy sector exchange-traded funds.
<h3>What Happened</h3>
In other words, Friday could be one of the ideal days for traders to embrace the Direxion Daily Energy Bull 2X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/erx#NYSE">ERX</a>) and the Direxion Daily Energy Bear 2X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>).
The bullish ERX looks to deliver <a href="https://www.direxion.com/product/daily-energy-bull-bear-2x-etfs">double the daily returns</a> of the Energy Select Sector Index while the bearish ERY seeks performances that are double the daily inverse returns of that benchmark.
<h3>Why It&#39;s Important</h3>
With 2020 likely to go down as one of the worst and most volatile years on record for the energy sector, it&#39;s not surprising that Wall Street is expecting losses from both Exxon and Chevron. Analysts expect a June quarter loss of 62 cents a share out of Exxon and a loss of 93 cents from Chevron.
Whatever the results are, it will be relevant to traders deploying ERX and ERY today because the Energy Select Sector Index devotes 46% of its combined weight to the two giants of the U.S. oil industry.
One of the Exxon-specific issues that could put ERX and ERY in play today is the company&#39;s commentary on its dividend. Exxon, which yields north of 8%, doesn&#39;t generate enough cash flow to cover the payout, but it also appears loath to cut the dividend.
The company &ldquo;is preparing deep spending and job cuts, according to people familiar with the matter, as it fights to preserve a 8% shareholder dividend with a multi-billion-dollar quarterly loss looming,&rdquo; <a href="https://www.reuters.com/article/us-exxon-mobil-cuts-exclusive/exclusive-exxon-prepares-spending-job-cuts-in-last-ditch-move-to-save-dividend-idUSKCN24V2RP">according to Reuters</a>.
Exxon&#39;s annual dividend expense is $15 billion, assuming no alterations are made.
<h3>What&#39;s Next</h3>
One day doesn&#39;t make a trend, but if Thursday&#39;s action is any indication, traders are warming to the idea of ERY being the way to go today. The double-leveraged bearish energy ETF jumped 7.72% yesterday on nearly double the average daily volume while the bullish ERX slumped 7.59%.
&ldquo;Aside from the typical interest in sources and uses of cash (and in particular, Chevron&rsquo;s ability to sustain its dividend), we will be interested to hear more on activity levels in the Permian Basin and Williston Basin, as these are the primary U.S. operating regions for Chevron&rsquo;s pending acquisition target Noble Energy,&rdquo; <a href="https://www.barrons.com/articles/exxon-mobil-chevron-earnings-preview-51596142685?mod=hp_DAY_12">notes CFRA analyst Stewart Glickman</a>.
The preceding post was written and/or published as a collaboration between Benzinga&rsquo;s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.

Earnings

Pre-Market Outlook

Big Day Looming for These Thrilling Energy ETFs

Direxion is dramatically altering the time frame for shifting 10 of its geared exchange traded funds to double from triple leverage, saying that those changes will go into effect after the close of U.S. markets on March 31 after originally being slated to be implemented on May 19.
Citing <a href="http://www.direxion.com/press-release/direxion-changes-objectives-of-ten-leveraged-funds-to-address-extreme-market-conditions-while-also-closing-eight-funds-due-to-limited-interest-since-launch">an unprecedented spike</a> in market volatility at the hands of the COVID-19 pandemic, Direxion said last week it planned to reduce the daily leverage exposure on 10 well-known ETFs, including the Direxion Daily Gold Miners Index Bull 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/nugt#NYSE">NUGT</a>) and the Direxion Daily Gold Miners Index Bear 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dust#NYSE">DUST</a>), to 2x from 3x.
&ldquo;Effective after market close on March 31, 2020 each Fund&rsquo;s investment objective and strategy will change to seek daily leveraged, or daily inverse leveraged, investment results, before fees and expenses, of 200% or -200%, as applicable,&rdquo; <a href="http://www.direxion.com/">said the issuer in a statement</a> released Friday after the market close. That timeline has now been moved up substantially after the firm received expedited approval from the SEC.
Other Funds Affected
In addition to the aforementioned NUGT and DUST, which are two of the most heavily traded leveraged ETFs in the U.S., the small-cap counterparts &ndash; Direxion Daily Junior Gold Miners Index Bull 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/jnug#NYSE">JNUG</a>) and the Direxion Daily Junior Gold Miners Index Bear 3X Shares (NYSE&nbsp;JDST) are also being reduced to double leverage.
Today, JNUG <a href="http://www.direxion.com/press-release/direxion-daily-gold-miners-index-bull-3x-shares-and-direxion-daily-junior-gold-miners-index-bull-3x-shares-underexposed-at-3-27-2020-market-open">traded with 260%</a> leverage instead of the usual 300%.
At a time of <a href="https://www.benzinga.com/trading-ideas/long-ideas/20/03/15686241/leverage-bullish-oil-etn-gets-an-upsizing-as-crude-prices-falter">increased duress in the oil patch</a>, Direxion will ratchet the Direxion Daily Energy Bull 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/erx#NYSE">ERX</a>) and the Direxion Daily Energy Bear 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>) down to 2x status. The same treatment is being applied to the ultra-volatile Direxion Daily S&amp;P Oil &amp; Gas Exp. &amp; Prod. Bull 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/gush#NYSE">GUSH</a>) and the Direxion Daily S&amp;P Oil &amp; Gas Exp. &amp; Prod. Bear 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/drip#NYSE">DRIP</a>).
The Direxion Daily MSCI Brazil Bull 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/brzu#NYSE">BRZU</a>) and the Direxion Daily Russia Bull 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/rusl#NYSE">RUSL</a>) are the other affected funds. All 10 products will see &ldquo;3X&rdquo; dropped from their names with &ldquo;2X&rdquo; moving in.
Wild Moves
At a times of elevated volatility, leveraged ETFs can deliver extreme moves in rapid fashion, testing uninitiated traders&#39; appetite for risk. For example, both the bullish JNUG and bearish JDST are saddled with losses this month to the tune of an average drop of 85.5%.
Geared ETFs use derivatives to obtain leverage, but that leverage isn&#39;t obtained on a dollar for dollar basis. Rather, if a geared fund has $100 million in assets, it <a href="http://www.direxion.com/wp-content/uploads/2012/09/Understanding_Exchange_Traded_Funds.pdf">must maintain $300 million</a> worth of exposure to the index it tracks.
In volatile markets, the need for daily rebalancing can hinder outcomes because a levered fund may increase exposure to an index in advance of a large decline and an inverse leveraged ETF can reduce exposure in advance of big rally.

Emerging Markets

Emerging Market ETFs

BRZU

DUST

GUSH

JDST

JNUG

NUGT

RUSL

Direxion Is Accelerating The Shifts Of 10 ETFs From 3x Leverage To 2x Leverage As Volatility Remains High

Friday brought an upbeat February jobs report, but confirming that market participants are locked into the coronavirus, stocks continued swooning as the number of confirmed cases of the respiratory illness in the U.S. ballooned past 230.
With major equity benchmarks&nbsp;such as the S&amp;P 500 and the Dow Jones Industrial Average&nbsp;residing below key trendlines, including the 200-day moving average, conditions are ideal for active traders to consider inverse and <a href="https://www.benzinga.com/trading-ideas/long-ideas/20/03/15463193/it-could-be-time-for-these-two-bearish-bank-etfs">leveraged bearish exchange traded funds</a>.
Here are a few names&nbsp;traders can consider if market conditions continue deteriorating over the near-term.
<h3>ProShares Short QQQ (PSQ)</h3>
The ProShares Short QQQ (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/psq#NYSE">PSQ</a>) is an ideal way for even conservative traders to participate in downside for technology and communication services stocks: this fund is inverse, though not leveraged.
What that means is that PSQ is designed to deliver the daily inverse performance of the popular Nasdaq-100 Index. So if that benchmark declines by 1% on a given day, PSQ should rise by 1%.
PSQ is also a good short-term hedge for investors holding the Invesco QQQ (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/qqq#NASDAQ">QQQ</a>), the Nasdaq-100 tracking ETF. Although PSQ isn&#39;t leveraged, those using it should still treat as a short-term instrument.
&ldquo;Due to the <a href="https://www.proshares.com/funds/performance/the_universal_effects_of_compounding.html">compounding</a> of daily returns, holding periods of greater than one day can result in returns that are significantly different than the target return and ProShares&#39; returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period,&rdquo; <a href="https://www.proshares.com/funds/psq.html">according to ProShares.</a>
<h3>Direxion Daily Energy Bear 3X Shares (ERY)</h3>
Friday&#39;s more than 15% jump, one built on heavy volume, by the Direxion Daily Energy Bear 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>) notwithstanding, it&#39;s easy to see why ERY is an alluring short-term play in the current environment.
The Organization of Petroleum Exporting Countries said earlier this week it&#39;s cutting output, and Exxon Mobil (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xom#NYSE">XOM</a>) and Chevron (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cvx#NYSE">CVX</a>) laid out budgets that indicate a large amount of prudence. Yet energy stocks are trading as if oil is at $20 per barrel, not the $43 area where it actually resides.&nbsp;
ERY aims to deliver <a href="http://www.direxion.com/products/direxion-daily-energy-bull-3x-etf">triple the daily inverse returns</a> of the Energy Select Sector Index, and the risk with this fund is clear: ERY has already more than doubled this year, and with the energy sector so battered, it may not take much after the coronavirus situation ebbs to ignite a rally here, punishing ERY in the process.
<h3>Direxion Daily Consumer Discretionary Bear 3X Shares (PASS)</h3>
Although the February jobs report would appear to indicate the U.S. economy remains on solid footing, it encompasses a period in which the coronavirus only started becoming a concern in the U.S. Now, it&#39;s a breakout &mdash; and one that could easily derail consumer confidence.
Look at Amazon.com, Inc.&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/amzn#NASDAQ">AMZN</a>), which is lower by more than 8% this month.
Amazon is relevant to the Direxion Daily Consumer Discretionary Bear 3X Shares (NYSE: PASS) because PASS&#39;s underlying index devotes over 23% of its weight to the e-commerce giant.
<h3>ProShares Ultra Short Industrials (SIJ)</h3>
The coronavirus is punishing the industrial sector, as highlighted by recently sour performances by Boeing Co&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ba#NYSE">BA</a>) and United Technologies Corporation&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/utx#NYSE">UTX</a>), just to name two.
Enter the ProShares Ultra Short Industrials (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/sij#NYSE">SIJ</a>), which tries to deliver double the daily inverse returns of the Dow Jones U.S. Industrials Index.
Looking at the Industrial Select Sector SPDR (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xli#NYSE">XLI</a>), a near-term case grows for SIJ. XLI is sporting a March loss approaching 14% and closed Friday about 11% below its 200-day line.

Broad U.S. Equity ETFs

4 Bearish ETFs Just Right For A Wild Market With Coronavirus Volatility

The following post was written and/or published as a collaboration between Benzinga&rsquo;s in-house sponsored content team and a financial partner of Benzinga.
Due in large part to the panicked selling caused by the spread of the novel coronavirus, also know as COVID-19, oil prices and energy equities are tumbling. For example, the United States Oil Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/uso#NYSE">USO</a>) slid 3.76% on Monday on heavy volume, extending its year-to-date loss to 16.16%.
Don&#39;t look to energy equities for refuge. The sector is being pounded by the coronavirus <a href="https://www.benzinga.com/trading-ideas/long-ideas/20/02/15371708/3-alternative-energy-etfs-crushing-it-this-year">and the shift to renewables</a>. On volume that was more than double the daily average, the Energy Select Sector SPDR (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xle#NYSE">XLE</a>) slumped 4.62% in Monday&#39;s sell-off, taking its 2020 loss to 14%.
Over the near-term, forecasting when the coronavirus issue will stop being an issue is becoming increasingly difficult, but that spells good news for the following bearish exchange-traded funds.
<h3>Direxion Daily Energy Bear 3X Shares (ERY)</h3>
The Direxion Daily Energy Bear 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>) looks to deliver <a href="http://www.direxion.com/products/direxion-daily-energy-bull-3x-etf">triple the daily inverse returns</a> of the Energy Select Sector Index, the same index the aforementioned XLE targets. With concerns mounting about the ability of Exxon Mobil (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xom#NYSE">XOM</a>) and Chevron (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cvx#NYSE">CVX</a>), the index&#39;s two largest components, to grow dividends this year, ERY was bound to catch a bid.
However, the coronavirus has turned into a significant spark for this bearish energy fund as ERY has amassed a year-to-date gain of 52.09%.
<h3>Direxion Daily S&amp;P Oil &amp; Gas Exp. &amp; Prod. Bear 3X Shares (DRIP)</h3>
This where the wild things are in the energy patch and the Direxion Daily S&amp;P Oil &amp; Gas Exp. &amp; Prod. Bear 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/drip#NYSE">DRIP</a>) proves as much. All this fund has done is more than double since Jan. 1. DRIP seeks performances that triple the daily inverse of the S&amp;P Oil &amp; Gas Exploration &amp; Production Select Industry Index.
Slack expectations for the global oil output are bolstering the near-term case for the bearish DRIP.
&ldquo;There is no escaping the fact that China&mdash;the world&rsquo;s largest oil importer&mdash;will have meaningfully weaker near-term oil demand than we had envisioned as the year began,&rdquo; said Raymond James analyst Pavel Molchanov <a href="https://www.cnbc.com/2020/02/24/oil-falls-more-than-4percent-sliding-into-bear-market-territory-as-coronavirus-sparks-demand-fears.html">in a recent note</a>.
<h3>Direxion Daily Natural Gas Related Bear 3X Shares (GASX)</h3>
Even in strong oil bull markets, a far-flung concept these days, the ISE-Revere Natural Gas Index has a way of lagging and that laggard status flares up when oil prices sink. Enter the Direxion Daily Natural Gas Related Bear 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/gasx#NYSE">GASX</a>), which looks to deliver triple the daily inverse returns of that index.
When GASX works, it really works as highlighted by yesterday&#39;s gain of more than 18%, one that extended the bearish geared fund&#39;s 2020 jump to north of 120%. That&#39;s also a reminder to not be caught on the wrong side of this trade.
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The preceding post was written and/or published as a collaboration between Benzinga&rsquo;s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.

GASX

3 Leveraged ETFs For Sinking Energy Stocks

Geopolitical headlines are one of the ideal catalysts for trading leveraged exchange-traded funds and traders looking to tap <a href="https://www.benzinga.com/trading-ideas/long-ideas/19/09/14432769/3-etfs-for-what-could-be-a-wild-day-in-the-oil-patch">geared energy ETFs Monday</a> got the volatility they were looking for.
<h3>What Happened</h3>
Oil prices enjoyed one of their best intraday performances in decades following drone strikes on Saudi Arabian oil assets that knocked 5% of the world&#39;s daily supply offline. This was good news for traders using bullish leverage oil funds and great news for those that had the foresight and fortitude to hold such products over the weekend.
Conversely, Monday was a forgettable day for traders that held inverse energy ETFs, such as as the Direxion Daily Energy Bear 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>) over the weekend.
<h3>Why It&#39;s Important </h3>
ERY is designed to <a href="http://www.direxion.com/products/direxion-daily-energy-bull-3x-etf">deliver triple the daily returns</a> of the Energy Select Sector Index. The weekend&#39;s events in Saudi Arabia notwithstanding, ERY was a risky hold into the weekend because the fund was already down about 21% this month with energy stocks perking.
The triple-leveraged bearish fund was punished Monday, losing 10% on more than triple the average daily volume. That will happen to a leveraged ETF where the underlying index allocates about 43% of its combined weight to Exxon (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xom#NYSE">XOM</a>) and Chevron (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cvx#NYSE">CVX</a>),<a href="https://investorplace.com/2019/09/surging-oil-prices-sent-stocks-lower-monday-with-dow-slipping/"> yesterday&#39;s two best-performing Dow stocks</a>.
Making matters worse is that for the 10 days ending Friday, Sept. 13, ERY took in nearly $5 million in new assets, good for the ninth-best total among <a href="http://www.direxion.com/products/direxion-daily-energy-bull-3x-etf">all Direxion ETFs</a>. In other words, some traders got caught making the wrong bets.
<h3>What&#39;s Next </h3>
With the benefit of hindsight, it is clear that the Direxion Daily Energy Bull 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/erx#NYSE">ERX</a>) was the geared energy ETF to hold into the weekend. Interestingly, there has been much in the way of noteworthy inflows or outflows from ERX as of late, but that could change after the fund surged 10.30% Monday on more than triple the usual volume.
If U.S. oil producers look to pick up some of the slack from the lost Saudi output and if that move doesn&#39;t force prices lower, ERX could have some legs as a winning bet over the near-term.
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Bad Timing Roasts Traders In This Leveraged Energy ETF

Although the market is nearing the point where the number of earnings announcements will begin to draw down, this week represents something like the final surge. Nearly 26% of the S&amp;P 500 is set to report quarterly results this week, some sectors will see a higher concentration of company reports than even that.
<h3>What Happened</h3>
The Energy Select Sector Index (IXETR), which resides more than 20% below its 52-week, meaning that it is in a bear market, sees just over 72% of its components report second-quarter results during the week starting July 29.
That batch of reports could present nimble traders with just the short-term catalysts they need to deploy the Direxion Daily Energy Bull 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/erx#NYSE">ERX</a>) or the Direxion Daily Energy Bear 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>). The bullish ERX looks to deliver triple the daily returns of the Energy Select Sector Index while the bearish ERY tries to mirror <a href="http://www.direxioninvestments.com/products/direxion-daily-energy-bull-3x-etf">triple the daily inverse returns</a> of that benchmark.
<h3>Why It&#39;s Important </h3>
With just over 72% of the Energy Select Sector Index report earnings this week, that means Dow components Exxon Mobil Corp. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xom#NYSE">XOM</a>) and Chevron Corp. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cvx#NYSE">CVX</a>), the two largest domestic oil companies, are slated to step into the earnings confessional. Those stocks combine for nearly 43% of the Energy Select Sector Index.
Analysts expect Exxon to post a quarterly profit of 69 cents a share, down from 92 cents a year earlier. Chevron is expected to report second-quarter earnings of $1.78 a share, in line with the 2018 second-quarter results. Both reports will be delivered Friday, August 2.
&ldquo;Exxon and Chevron usually keep earnings news releases and calls with analysts strictly about their quarterly numbers, but investors might be able to gauge their mood toward mergers and acquisitions when talk turns to expanding in the U.S. or their inventories,&rdquo; <a href="https://www.marketwatch.com/story/chevron-exxon-earnings-shale-ma-is-high-on-the-list-of-investor-concerns-2019-07-26?siteid=yhoof2&amp;yptr=yahoo">according to MarketWatch</a>.
<h3>What Happened</h3>
As we draw closer to Friday, August 2, it would be reasonable to expect increased activity in ERX and ERY. Direxion data indicate that last week, the bullish ERX and bearish ERY were mostly docile in terms of flows, though there was some slightly elevated activity <a href="http://www.direxioninvestments.com/products/direxion-daily-energy-bull-3x-etf">in some of the issuer&#39;s</a> other leveraged energy ETFs. ERX fell about 2% last week with the bulk of those declines coming last Friday.
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An Eventful Energy Week Looms For These ETFs

Something interesting is happening in the energy patch this year and it is not just oil&#39;s status as one 2019&#39;s best-performing commodities.
<h3>What Happened</h3>
While oil prices are surging, the energy sector is being left behind...sort of. The Energy Select Sector Index (IXETR), a widely followed gauge of large-cap U.S. energy stocks, is up 16.80 percent year-to-date.
That means the energy index is beating the S&amp;P 500 by 140 basis points. It also means that the large-cap energy index trailing the United States Oil Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/uso#NYSE">USO</a>), which tracks front-month West Texas Intermediate futures, by a 2-to-1 margin.
Why It&#39;s Important
Some analysts and market observers believe oil can hold steady at current levels and still trigger upside in energy stocks. That could open the door for more upside for the Direxion Daily Energy Bull 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>). ERY attempts to deliver <a href="http://www.direxioninvestments.com/products/direxion-daily-energy-bull-3x-etf">triple the daily returns</a> of the Energy Select Sector Index.
&ldquo;If the price of crude can hold above $60, the sector should have <a href="https://www.barrons.com/articles/oil-prices-analysts-pick-winning-oil-stocks-for-2019-51546450651?mod=article_inline">considerable upside</a>, according to JPMorgan,&rdquo; <a href="https://www.barrons.com/articles/energy-stocks-can-soar-if-price-of-oil-doesnt-fall-51554486837?mod=hp_DAY_12">reports Barron&#39;s</a>. &ldquo;Energy stocks have the most potential for gains, relative to the risks, in the overall market, the bank says.&rdquo;
The bullish ERY fell 6.61 percent last week, putting it among the 10 worst-performing bullish leveraged Direxion ETFs over that span, but it ERY can reclaim <a href="https://finviz.com/quote.ashx?t=ERY">the $40 area</a>, its upside from there could be significant.
<h3>What&#39;s Next </h3>
&ldquo;While insiders are buying, JPMorgan says meetings with asset managers and other indicators make it clear that the sector remains deeply out of favor with institutional investors,&rdquo; reports Barron&#39;s. &ldquo;Investment firms have been cutting exposure to energy to fund positions in other sectors, the bank says. Short interest is running high as more investors bet that energy stocks will underperform the market or turn negative.&rdquo;
There are some inklings traders are preparing for an energy sector rally. For the 10 days ended April 4th, ERY&#39;s inflows equaled 33.70 percent of its assets under management, good for the fifth-best percentage among Direxion&#39;s leveraged ETFs,<a href="http://www.direxioninvestments.com/products/direxion-daily-energy-bull-3x-etf"> according to issuer data.</a>
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Amplify The Energy Sector's Catch-Up Run With This ETF

The third quarter earnings season is in full swing, with the busiest week of earnings upon us.
But what makes this earnings season unique is it has been accompanied by a bought of volatility that, to be frank, is rather unusual in this market. Not only has the VIX reached levels not seen since the end of March, but the market has officially given back all its 2018 gains.
While it&rsquo;s likely causing headaches for investors, this general market/earnings volatility is a dream for traders, especially ones who use daily trading strategies.
&ldquo;As short-term traders, you like when there&rsquo;s volatility because it gives you a chance to be more tactical in your trading,&rdquo; said Sylvia Jablonski, managing director of leveraged ETF provider Direxion ETFs. &ldquo;And it lets you use active trading tools like leveraged products to gain more exposure or hedge yourself.&rdquo;
Jablonski was quick to note that leveraged ETFs, like those at Direxion, are short-term vehicles only and shouldn&rsquo;t be held for more than a few days. But they can be used around news catalysts by traders making a call on a whether a stock or sector will go up or down.
Over the past few weeks, for instance, she said that traders had been active in the Direxion Daily FTSE China 3X Bull and Bear Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/yinn#NYSE">YINN</a>) (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/yang#NYSE">YANG</a>) as the country&rsquo;s weakness has seemed to spearhead the sell-off in U.S. equities.
&ldquo;When we see a lot of traders coming in and out of funds like that, it&rsquo;s a signal that we should watch for volatility in the sector because a lot of traders are paying attention.&rdquo;
Jablonski also she&rsquo;s observed a lot of attention recently in the Direxion Daily Gold Miners Index Bull and Bear 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/nugt#NYSE">NUGT</a>) (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dust#NYSE">DUST</a>), which she said was not surprising considering gold&rsquo;s longstanding use as a hedge.
Looking ahead to next week&rsquo;s earnings slate, the Direxion Daily Technology 3X Bull and Bear Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/tecl#NYSE">TECL</a>) (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/tecs#NYSE">TECS</a>) and Direxion Daily Energy Bull and Bear 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/erx#NYSE">ERX</a>) (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>) will likely experience more activity, as some of the top holdings in those funds report earnings.
In technology, Mastercard Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ma#NYSE">MA</a>) and Apple Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/aapl#NASDAQ">AAPL</a>), which report Tuesday and Thursday respectively, make up 24 percent of the Technology Select Sector Index tracked by TECS and TECL.
In energy, Exxon Mobil Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xom#NYSE">XOM</a>) and Chevron Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cvx#NYSE">CVX</a>), which are the two largest holdings and make up nearly 40 percent of the Energy Select Sector Index, will report Thursday afternoon. So traders can more volatility in those stocks and corresponding ETFs.
&ldquo;We typically see a lot of attention paid to our leveraged sector products in the run-up to earnings,&rdquo; said Jablonski. &ldquo;And that can even last a few days after a big earnings report depending on the strategy. I would expect that to be the case through the rest of this earnings season.
&nbsp;

TECL

TECS

YANG

YINN

How The Market's Volatility Is Shaking Out In Leveraged ETFs

The Energy Select Sector Index (IXETR) is up about 4 percent, underscoring a solid performance by the resurgent energy patch.
Starting Friday, second-quarter earnings reports will test the energy sector&#39;s mettle as a slew of big-name sector components reports over the coming days.
<h3>What Happened</h3>
Energy is expected to be a primary driver of S&amp;P 500 earnings growth for the recently completed second quarter.
&ldquo;Q2 estimates moved up modestly since the quarter got underway, but the positive revisions were primarily because of the Energy sector. Excluding the Energy sector, estimates for the quarter would be modestly down in the last 10 weeks,&rdquo; <a href="http://www.direxioninvestments.com/xchange/q2-earnings">said Direxion</a>.
The first test arrived earlier today when Schlumberger N.V. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/slb#NYSE">SLB</a>), the world&#39;s largest oilfield services provider services provider, delivered a mixed report in which it achieved its consensus EPS estimate but missed its top-line projection by about $60 million. Schlumberger is the third-largest holding in the Energy Select Sector Index.
<h3>Why It&#39;s Important </h3>
The Direxion Daily Energy Bull 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/erx#NYSE">ERX</a>) aims to deliver<a href="http://www.direxioninvestments.com/products/direxion-daily-energy-bull-3x-etf"> triple the daily returns</a> of the Energy Select Sector Index. ERX&#39;s bearish counterpart, the Direxion Daily Energy Bear 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>), attempts to deliver triple the daily returns of that index.
Over the next week, ERX and ERY could see increased earnings-driven activity and volatility as a slew of the energy sectors marquee names report results. As was previously mentioned, Schlumberger reports Friday, but next brings the potential for significant opportunity with ERX and ERY.
From Monday, July 23 through Friday, July 27, seven of the top 10 components in the Energy Select Sector Index deliver second-quarter results. The July 26 and July 27 period is potentially significant for ERX and ERY because on those two days, because on those two days, just over half the Energy Select Sector Index reports earnings.
What&#39;s Next
Friday, July 27 could be an epic day for ERX and ERY because Exxon Mobil Corp. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xom#NYSE">XOM</a>) and Chevron Corp. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cvx#NYSE">CVX</a>), which combine for over 39 percent of the Energy Select Sector Index, deliver second-quarter results.
If ERX and ERY are accurate guides, traders are positioning for sell-the-news events. Over the past month, the bullish ERX is averaging daily outflows of over $866,000 while the bearish ERY is taking in average of $279,200 per day, <a href="http://www.direxioninvestments.com/products/direxion-daily-energy-bull-3x-etf">according to Direxion data</a>.
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Energetic Trades For Energy Earnings

Higher oil prices, expectations for increased gasoline demand with the summer travel season in full swing and looming second-quarter earnings reports are among the catalysts that could spark the energy sector in the near-term.
Thanks to rising oil prices and improved earnings, energy is one of a small amount of S&amp;P 500 sectors in the green year-to-date. The aforementioned catalysts and others could bring opportunity with leveraged energy exchange traded funds (ETFs), including the Direxion Daily Energy Bull 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/erx#NYSE">ERX</a>).
<h3>Why It&#39;s Important </h3>
ERX attempts to deliver triple the daily returns of the Energy Select Sector Index. A bearish counterpart, the Direxion Daily Energy Bear 3X Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ery#NYSE">ERY</a>), looks to deliver <a href="http://www.direxioninvestments.com/products/direxion-daily-energy-bull-3x-etf">triple the daily inverse returns</a> of that benchmark.
Energy sector sentiment is getting a lift from seasonality and encouraging inventories data. Recently, the Organization of Petroleum Exporting Countries (OPEC) and Russia agreed to up output to support prices around the $80 range and to make up for dwindling production in Venezuela. Even with the U.S. pumping at or near all-time highs, oil is one of this year&#39;s best-performing commodities.
<h3>Why It&#39;s Important </h3>
&ldquo;Catalysts for scarcity still exist for the most part, but now are amplified by an increasingly tenuous trade outlook, further turmoil in Venezuela, and increasing crude supply from the world&rsquo;s fastest growing oil exporter: The United States,&rdquo; <a href="http://www.direxioninvestments.com/xchange/energy-stocks-heating-up-just-in-time-for-summer">said Direxion in a recent note</a>.
Historically, the third quarter is unkind to the energy sector, but the bullish ERX gained about 2.5 percent last week. In the coming weeks, second-quarter earnings reports will trickle in, giving traders an opportunity to deploy ERX and ERY on an event-driven basis.
Dow components Exxon Mobil Corp. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xom#NYSE">XOM</a>) and Chevron Corp. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cvx#NYSE">CVX</a>), the two largest U.S. oil companies, combine for <a href="http://www.direxioninvestments.com/products/direxion-daily-energy-bull-3x-etf">more than 40 percent </a>of the Energy Select Sector Index&#39;s weight.
<h3>What&#39;s Next</h3>
&ldquo;In the near term, ExxonMobil has been getting the bulk of positive attention from the recent rally in crude prices and its buyback potential,&rdquo; said Direxion. &ldquo;However, components Chevron and EOG Resources Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/eog#NYSE">EOG</a>) have both shown strong bottom line growth this year, beating analyst estimates by 25 percent in their most recent earnings report. But, investors should also remain wary if the geopolitical picture gets too harried.&rdquo;
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