This ETF is clearly correlated to the price of oil which will also be
correlated, as any other fixed resource to the price of the underlying
currency from the market that you reside in.  So for us Americans, the
dollar is weakening which will contribute to the the rising $ price of
oil which will in turn cause people to envision more growth in the
green, alternative energy sector.  So if the dollar continues to fall
and the price of oil continues to rise, this will continue to go up.

Look at GEX vs. USO

Problem is oil will come down in price much more. Lately, it's gone up
due to traders pushing up the price and much less because of supply-
demand issues. OPEC has made any major changes and has even said that
there aren't any supply problems right now.

Developing countries like China didn't double their oil needs over the
past year so that argument for oil prices is weak too. There's no
fundamental reason for oil to have gotten this pricy, this quickly.
The weak dollar, also contributing to the issue, will get stronger
(eventually) and that too will contribute to lower oil prices. Oil is
coming down in price already. While I don't think people should lose
sight of the opportunities in GEX, when oil prices do come down there
may be some unfortunate selling off in alternative energy stocks,
railroads, and others that have benefited from this period of pricy
oil.

The reason why oil is trading so high is uncertainty coupled with
anticipated continued growth in demand.  The price is more or less a
function of projected growth in future demand not present supply.

The automobile market in China and other parts of the developing world
is likely to exhibit continued growth.

OPEC issues many statements publically because they are a political
entity as much as anything.  Many of the member states are enjoying
the benefits of high oil prices.  There will likely be a lack of
consensus to significantly increase supply.  Uncertainty overshadows
the whole market with Iraq, Iran, Russia, Venezuela and Nigeria all
exhibiting their own versions of instability coupled with a motivation
to promote and optimize their own agendas.  High oil prices benefit
the producers whose leadership will not look to long term consequences
on world economic growth or long term demand.

GEX reflects the ability to de-couple future demand for oil in several
ways.  Most major automobile manufacturers have established active
committments to deploy plug-in hybrids which will significantly
increase electricity demand (in the future).  A weak dollar will shift
more manufacturing to the US and maintain Chinese domanence in most
markets.  A way to incrementally increase electric generation in
pocket-sized capital expeditures is through the use alternative
energy.   Nuclear will be the backbone but these projects take decades
and billions of dollars.   A solar array or windfarm costs an order of
magtitude less but more importantly is deployable in less than 2 years
(in many instances).   GEX also reflects a decoupling of the price of
energy generation from commodity markets partially insulating a local
economy from price shocks and uncertainty.  It turns an economic
problem into an engineering challenge.  One critical strength in solar
and wind is that it can deliver energy where water resources are
scarce.  Nuclear, coal, natural gas etc. all depend on large
quantities of water as a cooling source.  Scarcity of water resources
will continue to place pressures on local economies to seek
alternative energy sources.   Additionally, the space requirements for
solar and wind are such that you can place a solar array on the roof
of your factory and a windfarm above the growing crops.  You cannnot
place a coal burning plant on top of your factory and a nuclear power
plant requires significant land resources.  The efficiencies and
advantages of alternative energy sources will play themselves out in
an accelerated fashion as more advanced manufacturers and local
economies realize these advantages.

There is no active support for strengthening the dollar coming from
any influential entity.  The looming recession of 2008 will likely
curb growth and therefore tame inflation enabling the Fed to cut rates
further (which will put downward pressure on the dollar).  Many
Chinese and Japanese banks are placed in an unusual position of both
holding a large amount of T-bills and are internally pressured to buy
more debt because of large dollar denominated reserves.  The middle
east is likewise holding a lot of dollars.  If OPEC begins trading
crude oil in Euros there will be marked downward pressure on the
dollar boosting exports from the US and slowing growth in many parts
of the world.   Unfortunately, most of the world economy is based on
American consumption.  A weak dollar will place pressure on local
markets to become less dependent on imports shipped to the US.

Wether or not any of this translates into continued upward price
growth in GEX is (in the short run) unknown.  But in the long run I
believe the Buffets of the world will see alternative energy's
potential and then the next dot com era will begin - so-called
".energy".

I have not mentioned global warming and all the politics associated
with that.   That is another discussion altogether.