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Two Ways: Economic Growth to Pull Commodities Higher


Strengthen your portfolio in good times and bad.

Roubini High on Commodities

Commodities have had a solid performance in recent times and those price trends aren't likely to end any time soon. So says New York University Professor Nouriel Roubini. Speaking at a mining conference in Western Australia, Mr. Roubini said the commodities rally could continue well into 2010 as the global economy begins to show more growth.

According to Bloomberg, Mr. Roubini said "commodity currencies" from countries like Australia and Canada could also continue to rise because the raw materials generate over 50% of their export revenues. Last week prices rallied the most in over four months as traders speculated the worst of the recession is over and demand would rebound. Mr. Roubini predicts the world economy to contract 2% this year, but swing to a growth of 2.3% in 2010.

From the Bull Pen: Glance at a daily chart of the oil ETF (USO) and we see gapfill at $37. The fact that the stock is trading above that level in the premarket is a bullish sign. A sell stop can be set 2% below entry.

From the Bear Cave: Bears are looking to names that have missed the recent stock party. Darden Restaurants (DRI) could be an opportunity. Consider entry near $34ish with a buy stop 2% above entry.

Quick Check Around the World

Asian trading closed with the Hang Seng 1.14%, India 1.62%, Shanghai 1.48%, Nikkei -0.04%, and Taiwan -0.30%.

Across the pond, we see the FTSE 1.82%, CAC 1.54%, DAX 1.85%, Swiss Market 0.78%.

As of 8:00 AM EST, S&P Futures are trading +9.50 to 994.00 and Nasdaq futures are +17.75 to 1619.75.

A Look at Commodities

Over in commodities, crude oil is trading +1.80 to 71.25 while gold is +2.900 at 956.60 this morning. Silver is +0.340 to 14.28 and copper +10.60 to 272.95.

The dollar index is -0.4150 to 78.0350.

On the Radar


10:00 Construction Spending -0.6% cons
10:00 ISM Index 46.5 cons
2:00 Auto Sales
2:00 Truck Sales

Click here for the full trading radar.

It's good to be back, Minyans! Good luck and let's have an awesome week!
No positions in stocks mentioned.

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