Firstly, let's look at gold:
The daily chart of GLD goes back one year and shows that the yellow metal has been seriously under-performing the S&P 500 for the last 12 months. Recently, however, I am detecting some developing signs of strength in this market. Firstly, the short term trend has turned up - this is a good first start. Second, the long term trend (the blue "clouds"), although still down, is slowly starting to turn around. Lastly, Friday's price action was bullish, with a tall white candle forming as the bulls took control away from the bears.
I was planning on shorting ZSL on Monday, which was down over 7% this week, but my broker did not allow this. I did buy a gold stock instead, RGLD and I am just as satisfied with that.
Besides precious metals, agricultural commodities are really starting to catch my eye. The next chart shows an ETF that follows the price of cocoa:
At Stockcharts.com, you can better view the price of soy beans by typing in $DJASY. A longer term chart using this symbol shows new multi-year highs being made.
Finally, we have a daily chart the price of wheat:
Unlike soy beans, this commodity is in an earlier stage of a bull market, as the long term trend only recently turned up. The bottom line though is that all of these commodities are looking strong.
An ETF that follows the price of wheat is ticker symbol WEAT.
As for me, I will not be buying any of these right now, as I have on half a dozen positions at the moment, which, according to my written rules, is the highest the number of positions I can have on at one time.
