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Two Ways to Play: Commodities Suffering


Strengthen your portfolio in good times and bad.

Commodity Slump

Commodities are suffering their biggest declines since the meltdown 13 months ago. According to Bloomberg, the Standard & Poor's GSCI Index of 24 raw materials is down 6.2% this month, the most since December 2008.

The biggest decliners were zinc and lead, which fell 16% and 14% respectively. Crude oil fell 6.8% and copper dropped 6.6%.

In 2009, commodities rose the most in 40 years due in part to demand from government spending programs. Barclays estimates that investors poured in $92 billion into the sector last year. See related article, Lance Lewis's What Does George Soros Really Think of Gold?

From the Bull Pen: Bulls can look to the gold ETF (GLD), which may be finding some support near $105. A sell stop can be set near $104-$103 depending on your risk profile.

From the Bear Cave: Bears can look elsewhere. Con Edison (ED) may be forming a bearish flag. Those playing it can set a tight buy stop above $44-$45.

For more ways to play and other trading ideas from more than 30 top market pros, take a free trial to our Buzz & Banter.

A Quick Check Around the World

Asian trading closed with the Nikkei -2.08%, India 0.31%, Hang Seng -1.15%, Shanghai -0.16%, and Taiwan -0.70%.

Across the pond, we see the FTSE 0.75%, CAC 0.80%, DAX 0.96%

As of 8:15 AM EST, S&P Futures are trading +4.50 to 1083.75. Nasdaq futures are +6.50 to 1777.00.

A Look at Commodities

Over in commodities, crude oil is +0.02 to 73.66 while gold is +0.800 to 1083.50 this morning. Silver is +0.073 to 16.285 and copper +0.0175 to 3.1155.

The dollar Index is +0.1000 to 79.2000.

On the Radar


08:30 GDP 4.5% cons.
08:30 Chain Deflator 1.3% cons.
08:30 Employment Cost Index 0.4% cons.
09:45 Chicago PMI 56.0 cons.
09:55 University of Michigan Sentiment 73.0 cons.

Click here for the full trading radar.

Happy Fit Friday! Good luck and have a great weekend!
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No positions in stocks mentioned.

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