Brad Zigler

Commodity ETPs Closing in on a Bull Market

Well, as you can see, we follow the ratio of MOO to GCC, the ETF based upon the current iteration of the CRB Index. Like the GDX/GLD ratio, this quotient describes the relative strength of commodity stocks to commodities themselves (or their futures proxies).

No, we haven't run correlations between MOO and DBA, but we'd suspect a similiar volatility "premium" for the two ETFs as you've noted between GLD and GDX.

The reason? Much like mining stocks, once a company's goods command a market price above production costs, margins flow straight to the bottom line. Call it "leverage."

Doesn't happen often, but at times it's better to hold commodity stocks than commodities themselves. With a resurgent equities market, this may be one of those times.

On May 09 06:44 PM RiskReturnOptimizer wrote:

> Excellent. MOO is much strong, hoping it could serve as leading indicator
> for DBA. Have you guys studied the correlation / leading effects
> of MOO on DBA? Much has been written about GDX vs. GLD. I prefer
> DBA since it tends to be less volatile than MOO. GDX, on the other
> hand, tends to be more volatile than GLD. Why?

Commodity ETPs Closing in on a Bull Market

Actually, we HAVE talked up agriculture recently at Hard Assets Investor.

The last Desktop (www.hardassetsinvestor...) piece on ags, in fact, highlighted a breakout of agribusiness stocks vis-a-vis a broad-based commodities (and relatively ag-heavy) index ("A Good Thing: Agribusiness Future Isn't Golden" at www.hardassetsinvestor...).

DBA's Friday close at $26.73 just cleared a 24% retracement of the ETF's 2008 breakdown. DBA's been at this level in 2009 before, though. An upside probe failed in January.

A close above $27.15 would signal strength, but there's a gap to be filled between $27.53 and $28.12. The market's buoyancy after that gap is filled (IF it's filled) would signal new buying interest.

Commodity ETPs Closing in on a Bull Market

We at Hard Assets Investor HAVE noted the differences between ETNs and ETFs in past articles.. Several times.

The table, in fact, distinguishes each security by type.

Commodity ETPs Closing in on a Bull Market

You'll note, I hope, that the securities mentioned in the article are all denominated in U.S. dollars.

The perspective is admittedly dollar-centric because that's where (the U.S., that is) the competition for assets is strongest. No other geographic venue offers so many choices for broad-based commodity exposure through ETPs.

Anybody investing in these securities ultimately must confront the dollar/gold cross rate.


On May 08 08:22 AM dcb wrote:

> when commenting upon gold you have to view it in different ways depending
> on the currency you are buying it in.
>
> If your currency had been crushed and you bought gold and enjoyed
> the ride up. this preserves wealth. but if you sold before you may
> be thinking of buying again because now gold has dropped so much
> it is an inflation hedge. the story on gold is not easy to ascertain.
>
>
> our 10% drop could be a 30% drop in another currency so gold may
> be a deal again.

Commodity ETPs Closing in on a Bull Market

None of your remarks are germane. To what article are you responding?

No mention of "Americans" much less "Jews" was made in the article. Ditto for "evil."


On May 08 05:10 AM UbaTuba wrote:

> Consider what you have said:
>
> 1) You're very first statement groups all individuals of a certain
> geographic region into one moral summary that they are all bad. You
> have placed yourself against Reality, because Reality is: people
> are individuals. Only individuals possess the trait of character.
> Character emanates from the bones of individuals, but labels; such
> as, "Americans" say nothing important other than your own mental
> error of over-simplifying Reality to meet your cherish of malice
> without responsibility for accuracy.
> 2) You've committed the same error with the label: "Jews" - convenient
> to label everything you hate under one name, but just out-of-touch
> with the real world. For example, some of the greatest physicians
> in the world are Jewish along with many other "nationalities".<br...
> Hatred is addictive and satisfying, especially so when your imagination
> allows you to falsely attach evil to a group rather than (rightly)
> to a specific individual committing or omitting specific moral actions.
> As such, Hatred for the imagined "groups" as you have described it,
> is just plain lazy, because "groups" can't be evil or good. Only
> individuals can be so. If you have a specific beef about a specific
> individual's actions, then I'm listening, but this "one-size-fits-all"
> thing is nuts!