Commodity ETF Alert October 2009 Portfolio Update

October 27, 2009

Oil Surges Over $80 A Barrel.  Can $100 Be Far Behind?

This is a trend that’s been more than a year in the making.

We’ve see Oil prices rise to over $147… then fall to under $35.  We watched as the economic recession crushed demand and now the economic recovery is driving demand higher.

We captured gains from OPEC jawboning prices higher.  Then watched as OPEC cut supply… pushing prices even higher.

I told you to buy Oil back in February with prices around $46 a barrel.  Those of you who followed the advice made some nice profits.  See the Oil update below.

Now the question is:  “Where to from here?”

I believe prices still head higher… But I think we’ll pause for a while as Oil consolidates. Only time will tell.

Now, let’s take a look at our open positions…

Position Updates

. . . iPath Dow Jones-UBS Platinum ETN (PGM) – Buy up to $34.50

This was our new trade this month.  We’re up a little off of our entry price, but have not yet moved above the buy-up-to price.  If you haven’t already, consider adding PGM to your portfolio.

. . . iShares Silver Trust (SLV) – Buy up to $17

We’re continuing to hover around our buy-up-to price.  Once again, as the recession becomes a recovery and the US Dollar continues falling, Silver should move higher.

If SLV is still under our buy-up-to level of $17, consider adding some to your portfolio.

. . . iPath DJ AIG Natural Gas TR Sub-Index ETN (GAZ) – Buy up to $17

Natural Gas has been hovering around our entry point.  The commodity itself has moved a little higher.  Just wait for the winter to drive demand through the roof.

We’re still under our buy-up-to price so if you haven’t already, consider adding GAZ to your portfolio.

. . . iShares COMEX Gold Trust (IAU) – HOLD

Gold has established itself above the $1,000 level.  Now the gold bugs are starting to call for the next stop to be the inflation adjusted high of over $2,200!

Might we get there?

Sure, but it might be a while.  The biggest driver of gold prices will be the threat of inflation and a falling US Dollar.  So far we’ve been on the right side of the trade!  Give it more time.

. . . iPath Dow Jones–AIG Copper ETN (JJC) – HOLD

Copper continues to slowly move higher.  After we captured the initial bounce higher, the metal’s been trading in a nice range.  Give this trade more time to work out.

As homebuilding numbers move higher, demand for copper is sure to jump.  The weaker dollar hasn’t hurt either.  Hold tight to JJC for now.

. . . iPath S&P GSCI Crude Oil Total Return ETN (OIL) – SELL

This week, Oil hit our price target of $27.  Oil moved through the $80 a barrel level on news that the US Dollar was falling in value and the global recession is fading.

Let’s take our 44% profit all the way to the bank!

Action To Take

• Sell Oil (OIL), we hit the price target!

Category: Commodity Trading