A COMMODITIES CRUMBLE

September 21, 2006

By seadmin

Amid the swirl and conflicting opinion on inflation and its potentially caustic effect on the economy, few on Wall Street appeared to have noticed the big decline in commodities prices during the last six weeks. In fact, one glance at a price chart of the PowerShares DB Commodities Index Tracking Fund shows us just how sharply commodities prices have fallen of late.

Now, while much of this decline can be attributed to the recent pullback in crude oil prices, there also is a large portion of this index that reflects a big drop in industrial commodities.

I bring this trend in commodities to your attention for two reasons. First, it’s important to know some of the driving factors that contribute to monetary policy and that can have a profound effect on the equity and bond markets. Second, whenever I see a steep drop in an index, bells start going off in my head that alert me to a potential profit opportunity in my ETF Trader service.

And while I am not ready to declare myself on board with a future turnaround in the commodities market, it is important to recognize trends and their potential reversal points when your goals are short-term profit maximization. It’s these turnaround candidates that often give investors big returns. However, it requires a skilled analyst to know the difference between a comeback and a laggard.

That kind of skilled analysis is what my ETF Trader advisory service is all about.

Want to learn more about how to profit from acute market trends? Click here.

Jim Woods is a 30-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor.

His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. Read more about Jim Woods.

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A COMMODITIES CRUMBLE