Commodity ETF Alert March 2009 Portfolio Update
March 24, 2009
February was bad to the downside… March is great to the upside. In the last two weeks, we’ve seen the Dow rally more than 1,000 points.
Our “all commodities” index, the iPath Dow Jones–AIG Commodity Index (DJP), is up more than 11%. Great news for most of our commodity trades… keep reading for the details.
The recent Fed announcement was a huge help to commodity prices. The Fed’s expanding the balance sheet. Combined with massive amounts of government stimulus and easy money, inflation fears are on the rise. This is helping commodity prices rally… especially gold.
Just yesterday, we got some news out of Washington… Senator Tom Harken has decided to back Gary Gensler to lead the CFTF. The former Goldman banker has decided the time is now for aggressive regulation… especially of derivatives.
Let’s take a look at our open positions…
Position Updates
. . . . iPath Dow Jones–AIG Grains ETF (JJG) – HOLD
This trade is running up nicely. We established the trade around the $36 level. Now we’re trading above $39. That’s an 8% move in just a few weeks. Concerns over Argentina farmers’ production are driving beans higher. Corn is moving up toward the $4 a bushel level. If corn breaks through that resistance level, we could get a decent run up in JJG.
We’re moving JJG to a “Hold” as we crossed above the buy up to price.
. . . . iPath S&P GSCI Crude Oil Total Return ETN (OIL) – Buy up to $20.25.
It looks like this trade is finally heading in our direction. Just last week, oil traded above the $20 mark. Driving oil higher is two old friends: falling gas inventories and OPEC production cuts. OIL is still a buy up to $20.25.
Action To Take
• Move JJG from a Buy to a Hold.
Category: Commodity Trading
