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Don_Bartell [1865]

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17-Mar-08

Topping action in commodities?--Grains, Metals, Energy

My stops were hit on a number of these ETF's today, and looking at the charts of the underlying commodities--Corn, Wheat, Soybeans, Sugar, Copper, Natural Gas, Crude--it appears to me that at least an intermediate top is setting in. The range, breadth, and volume on these were especially worrisome. Also, about half of the gold stocks that I still hold calls on turned in one type or another of a reversal day. So I'm reducing my current exposure on gold, which (including my calls), comes to about 20% of the account. Cutting back to about 10%. Also, although this is probably the height of foolishness, I'm actually going to take my system sell signals on DBA and UNG and short those. See www.bohlish.com for the various key underlying commodity charts.

Posted at 21:21 in Uncategorized | Permalink | Comments () | Top

5 Comments on "Topping action in commodities?..."

Yesterday oil dropped impressively. After the Feds lower interest rates watch the price of oil. If no enhanced positive reaction then oil is played out . Will soon take the dive.

PHP

Posted on 18-Mar-08 04:59 by pablo222

Hi Pablo, It'll be interesting to see how this all plays out. Given the grim overall financial news, it's hard to imagine all of the smart places to put dollars going down, but then, if that should happen, I suspect we'll then be presented with plenty of hindsight rationales for that. Right now, I'm really just looking at the price action, and will let my system end up telling me whether this was smart, or just another one of my dumb ideas. Thanks again! Don

Posted on 18-Mar-08 06:21 by Don_Bartell

Don,
I'm with you concerning shorting commodities. In fact, I just opened a position in DBA. Rationale:
Gold, Oil and Commodities are selling off big time today, after (!) yesterdays rate cut and despite significant inflationary pressure. What happens here IMO is that the big guys start shifting back their money into the stock market (420 points in the DOW yesterday!). One of the reasons for the rise of commodities was the absence of investing alternatives. Hedge funds simply HAD to put their money there to make SOME returns.

Unfortunately, my broker doesn't allow me to short USO. Do you know any alternatives by chance?

My 2 cnts

Posted on 19-Mar-08 08:51 by Michael_Arold

Hi Michael, Thanks for your comments on commodities. The closest thing I know of for a short for USO would be the Proshares ETF's. I'm personally buying DUG on the open (that's the Ultra bear version of the DJ Oil & Gas index IYE). DUG closed today at 41.99. My initial stop will be at 35.52. Good luck! Don

Posted on 19-Mar-08 20:41 by Don_Bartell

Thx, Don. Yesterday I shorted some COP (out of desperation :-) I had to move fast)

Happy trading

M

Posted on 20-Mar-08 05:02 by Michael_Arold

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