The Daily Commodities » Brian Hunt

Chart of the Week: Huge Breakout in Crude Oil

DailyWealth.com — Fri, 02 Apr 2010 12:30:12 +0000

The long “sideways saga” of crude oil is over. That’s the idea behind our chart of the week.

In late 2008, we told readers to load up on crude oil bets almost on the exact day the stuff bottomed around $35 per barrel. Oil was extremely cheap relative to gold back then. On cue, the black stuff rallied 100% in the next six months. But since June, the price of crude has drifted sideways in the mid-$70s.

Our chart below shows that sideways period is over. Crude just “broke out” to a new high around $85 this week.

Most energy analysts see this price as too high given the supply/demand fundamentals. But as we’ve highlighted with surging financial stocks, copper prices, and restaurant shares, it’s obvious the Fed’s great reflation program is boosting the price of everything under the sun.

This Currency Trade is Screaming

DailyWealth.com — Wed, 03 Mar 2010 15:01:17 +0000

THIS CURRENCY TRADE IS SCREAMING

“Wow.” That’s the word that describes the massive decline in the British pound since we said “look out below” last month.

On February 6, we showed you a chart of the impending breakdown in the value of Britain’s paper currency, the pound. Britain’s government is a world leader in excessive spending and excessive debt. Since “there ain’t no such thing as a free lunch,” it was only reasonable to expect the breakdown to lead to more pound weakness.

But even we didn’t expect the clobbering you see in the chart below, which shows the past year’s trading in FXB, a fund that tracks the British pound. FXB has lost 4.3% in the past month. While this doesn’t sound like much, it’s an enormous fall for a major currency… one millions of people must use to carry out basic transactions.

Currencies are the aircraft carriers of the financial world. Once they get a head of steam built up and begin trending, they take a long time to change course… so currency traders can continue to take a bearish bias here. Or you could take the excellent “sleep at night” currency advice from our colleague Porter Stansberry and simply trade paper pounds for gold and silver.

How to Judge the “Half Full vs. Half Empty” Debate

DailyWealth.com — Fri, 26 Feb 2010 09:24:09 +0000

HOW TO JUDGE THE “HALF FULL VS. HALF EMPTY” DEBATE

The great guru debate right now: Is the economy in a real recovery, and is a decent job market on the way back? Or are high-profile bears like Harvard’s Ken Rogoff right? Are new debt “shockwaves” set to rock everything?

As always, let’s consult the market… and let’s mind a huge potential “1-2-3 trend change.”

Bulls need the uptrends in companies like Darden Restaurants and Home Depot to remain intact. These uptrends tell us the government’s E-Z-Credit program is keeping the consumer and the banking industry afloat. If the uptrends suffer severe breakdowns, we’ll know the negative effects of the credit bubble are still with us.

And don’t forget to watch copper as a “must hold” asset for the inflationary bullish case. Copper is an essential ingredient in cars, refrigerators, power lines, and electronics. However the economy is performing – good, bad, ugly – you’ll see it reflected in copper prices. As you can see from the chart below, copper suffered a major decline in late January/early February (1). It has since made an effort to climb back to its old high, which failed (2).

We now have a situation where copper is set up for a classic Vic Sperandeo 1-2-3 trend change, just like the euro experienced in December. If copper turns lower – and blows through its recent low around $2.85 per pound (3) – the E-Z-Credit stimulus boom is withering.

Jim Rogers’ Favorite Bull Market

Jordan Roy-Byrne, CMT — Tue, 12 Jan 2010 06:20:02 +0000

JIM ROGERS’ FAVORITE BULL MARKET

It’s still a quiet bull market in the “contrarian’s commodity investment.”

Last year, we kept you updated on the steady uptrend in Jim Rogers’ favorite commodity investment. It’s an uptrend that goes unreported in the mainstream financial press… and one you can see below in the investment fund DBA. This fund is a one-click way to buy the agricultural commodities corn, soybeans, wheat, and sugar.

Why is DBA the contrarian’s commodity idea? Well, commonly traded commodities like crude oil, gold, copper, and platinum have soared in the past year. Copper, for instance, is up 125% in the past 12 months. The ag complex, however, is in the “beaten down” category. But as you can see from today’s chart, the DBA is quietly building a series of “higher highs and higher lows.” It’s classic bull-market action… action that will likely carry DBA to an upside breakout above June highs.

We’ve spent time thinking about how an investor can earn income from farmland – without going to Brazil or Iowa to buy 640 acres and a tractor. In tomorrow’s Market Notes, we’ll show you a way to collect 15%-20% annual yields on this idea.