Monday, February 16, 2009

Commodity ETFs and ETNs Update II

This is an update to my previous article Commodity ETFs and ETNs Update that was posted on January 18, 2009. It has been one month since that article so I wanted to take a look at my performance and re-evaluate going forward.

On January 18, I listed picks and pans. Here is my performance since:

PICKS
FundPrice on 1/18Price on 2/16% Change
GLD (Gold)82.7192.55+11.90%
LD (Lead)31.1331.24+0.35%
NIB (Cocoa)38.8842.06+8.18%
BAL (Cotton)28.1326.38-6.22%

PANS
FundPrice on 1/18Price on 2/16% Change
UNG (Natural Gas)19.8318.32-7.61%
JJU (Aluminium)22.1421.15-4.47%
COW (Livestock)32.8132.36-1.37%

If you invested $1,000 in each of the four picks you would be up 3.55% and have made $142.08. This compares to -4.49% and a loss of $132.68 with the three pans. If you went long the picks and short the pans you would be up 3.93% and have made $274.76. I hate to boast but even I am surprised by my strong performance.

Let's take a look at the updated charts. At the end I will list my updated picks and pans. Click on all charts for larger views.

ENERGY
USO (United States Oil Fund)
Current price: 25.60
52 week high/low: 119.17/25.17
% off high/low: -78.52%/+1.71%
1 year chart with bollinger bands

UNG (United States Natural Gas Fund)
Current price: 18.32
52 week high/low: 63.89/17.87
% off high/low: -71.33%/+2.52%
1 year chart with bollinger bands

Both oil and natural gas made new 52-week lows in the past month. Both may be leveling off at this point, however, so I am removing my short position from UNG. I think it is time to go long both USO and UNG.


PRECIOUS METALS
GLD (SPDR Gold Trust)
Current price: 92.55
52 week high/low: 100.44/66
% off high/low: -7.86%/+40.23%
1 year chart with bollinger bands

SLV (iShares Silver Trust)
Current price: 13.54
52 week high/low: 20.73/8.45
% off high/low: -34.68%/+60.24%
1 year chart with bollinger bands

PTM (UBS E-TRACS Platinum)
Current price: 13.05
52 week high/low: 27.29/8.56
% off high/low: -52.18%/+52.45%
4/1/2008 to Present chart with bollinger bands

Gold, silver and platinum have all moved up nicely in the past month so I think they are due for a rest. Silver has gotten ahead of itself the most, so I will short SLV at these levels. There were no new 52 week highs/lows for this group in the past month.


INDUSTRIAL / BASE METALS
JJC (iPath Copper)
Current price: 21.74
52 week high/low: 58.40/17.97
% off high/low: -63.77%/+20.98%
1 year chart with bollinger bands

JJU (iPath Aluminum)
Current price: 21.15
52 week high/low: 54.16/20.45
% off high/low: -60.95%/+3.42%
6/25/2008 to Present chart with bollinger bands

JJN (iPath Nickel)
Current price: 15.49
52 week high/low: 53.46/13.80
% off high/low: -71.03%/+12.25%
1 year chart with bollinger bands

JJT (iPath Tin)
Current price: 24.27
52 week high/low: 52.46/21.79
% off high/low: -53.74%/+11.38%
6/25/2008 to Present chart with bollinger bands

LD (iPath Lead)
Current price: 31.24
52 week high/low: 62.20/23.87
% off high/low: -49.77%/+30.88%
6/26/2008 to Present chart with bollinger bands

Lead still looks like the strongest in this group and so I will maintain my long stance in LD. Aluminum (JJU) still looks very weak, so I reiterate my pan on it. In this group, only aluminum made a new 52-week low in the past month.


AGRICULTURE
NIB (iPath Cocoa)
Current price: 42.06
52 week high/low: 48.23/30.21
% off high/low: -12.79%/+39.23%
6/25/2008 to Present chart with bollinger bands

JO (iPath Coffee)
Current price: 35.17
52 week high/low: 49.79/32.40
% off high/low: -29.36%/+8.55%
6/25/2008 to Present chart with bollinger bands

BAL (iPath Cotton)
Current price: 26.45
52 week high/low: 46.65/23.19
% off high/low: -43.30%/+14.06%
6/26/2008 to Present chart with bollinger bands

SGG (iPath Sugar)
Current price: 46.15
52 week high/low: 57.65/36.36
% off high/low: -19.95%/+26.93%
6/25/2008 to Present chart with bollinger bands

DBA (PowerShares DB Agriculture)
25% corn, 25% soybeans, 25% sugar, 25% wheat
Current price: 25.20
52 week high/low: 43.50/21.52
% off high/low: -44.37%/+12.45%
1 year chart with bollinger bands

Last month, I recommended cocoa and cotton but noted that the entire group looked strong. Cotton (BAL) now looks like the weakest of the group so I will remove my recommendation. I will add sugar (SGG) and coffee (JO) to my recommended list. In the past month, there were no new 52-week lows in this group.


LIVESTOCK
COW (iPath Livestock)
67.9% live cattle, 32.1% lean hogs
Current price: 32.28
52 week high/low: 46.66/30.33
% off high/low: -30.49%/+6.43%
1 year chart with bollinger bands

Livestock has continued to fall and make new lows in the past month. I reiterate my pan of COW.

Here are my updated picks and pans as of 2/16/2009. Overall, I changed about half my selections since last month. I am a bit apprehensive about going as heavy as I have in agriculture, but I think this is going to be the place to be in 2009 so I am investing that way.

Picks:
USO (Oil)
UNG (Natural Gas)
LD (Lead)
NIB (Cocoa)
SGG (Sugar)
JO (Coffee)

Pans:
SLV (Silver)
JJU (Aluminum)
COW (Livestock)

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