The G Manifesto

Commodities: For all Scenarios

Weekly Commentary
For July 27th– July 31st 2009
By: Matthew Bradbard
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When I started working in commodities, almost a decade ago, they were considered a dirty word and certainly not a place for the average Joe to invest. Within the last few years, thanks to investors becoming more open minded, the overall performance of commodities and other asset classes, commodity futures and options are quickly becoming a respectable asset class. Case in point, over the weekend while reading the WSJ there were 3 different scenarios and portfolio allocation suggestions, regardless of the scenario all 3 had a place for commodities. One that fears inflation should have as much as 25% allocated to commodities, one fearing deflation only a 10% allocation, with the middle of the road being 15%. While we agree with the percentages we suggest investors get more informed on trading futures and options not just commodity ETF’s.

To find out exactly how we are positioning our clients in commodity futures and options, Contact us today at 1-888-920-9997. Don’t forget to tell them The G Manifesto sent you.

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Energies
The DOE reported that crude oil supplies were down 1.8 million barrels, supplies of gasoline were up 800,000 barrels while heating oil supplies were also up 800,000 barrels. September crude oil ended higher by $3.68, the highest close since 7/2. The pivot point currently stands at the 50 day moving average of $67. $68.50/69.00 should act as resistance with support at $65.00. The easy money has been made on longs being that in the last 10 sessions prices have gained 11%. September heating oil was higher by 13.93 cents last week. Support comes in at 1.78 followed by 1.75 with resistance seen at 1.86/1.87. On a further rise in crude we could see 1.90, if long trail stops. September RBOB gained 14.30 cents last week though prices are starting to look toppish. We’re not advising getting short but we could see a setback, follow crude’s lead. Support is seen between 1.83 and 1.8450 with resistance at 1.9250.

The DOE reported that natural gas supplies were up 66 billion cubic feet last week to 2.952 trillion cubic feet. September natural gas closed up 4 cents last week with a trading range of almost 40 cents. A potential double top formed last week at $4.05 as prices failed to get through the 50 day moving average after 2 attempts. That level should serve as resistance at $4.03 with support at $3.65. We are still advising clients $1 call spreads, on multiple positions split the purchase between October and November.

Continue Reading about Softs and Metals

To view our full commentary which includes the sectors of energies, livestock, currencies, financials, grains, softs, and metals, subscribe by visiting this link: http://mbwealth.com/subscribe.html.

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Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Before trading MB Wealth recommends that you should carefully consider your financial position to determine if commodity trading is appropriate for you. All funds committed should be purely risk capital. Past performance is no guarantee of future trading results. There are no guarantees of market outcome stated, everything stated above are our opinions.