My Top 5 Commodity Plays for The Year
By: Halston
The money to be made over the next several years in basic commodities is incalculable. You don't want to miss out on this upcoming market opportunity. We are in the midst of entering the next leg of the first major move in commodities in the past 30 years. Pretty much every market has made gains, consolidated, and is now ready to continue upwards. If past bull market history can shed any light on the current situation, prices of almost every commodity will probably take off to new all-time highs over the next two to three years. Here are my picks for the best trades for 2007:
1 - Gold
Keep buying it. In my opinion, the effective "floor" in the gold market, at least for the foreseeable future, is close to $550. After an initial run-up over the $600 an ounce level, the gold market went through a correction/consolidation phase, retracing about half the distance between $625 and $525. It is, as of this article, back up around the $630 level. Expect gold to take out its former all-time record, and move well above $1,000 an ounce. Between gold and silver, to date gold has been the market leader, which is why I would recommend it over silver. I would be floored myself to see gold fall back under $500 anytime soon--but I would not be surprised in the least to see the price of gold over $2,000 an ounce within the next 18 months.
2 - Cotton
Cotton has been, up to this point, a kind of "weak sister" in the overall bull market in basic commodity prices. Whenever it decides to join the flow of the overall market, I expect it to play catch-up very quickly. Currently, cotton is languishing around the 50-cent level, despite steadily growing export demands from China and India, and despite the fact that the cotton belt across the South still has not fully bounced back from the destruction of Hurricane Katrina. My prediction: cotton will double in price during the next 24 months.
3 - Wheat
Among the grains, wheat has revealed singular determination almost since the starting point of the current bull market. Even on days when USDA reports sent soybeans and corn tumbling down, wheat managed to push through. My long-term price target for wheat is $8-$10.
4 - Cocoa
Cocoa's performance has recently been in line with the gold market: for a few years it was stuck at the same price, but then in the most recent bull market, cocoa prices advanced up to the mid-$20s. They have since pulled back to $14-$15, but recent signals of prices hitting the floor mean a turnaround could be waiting just around the bend. As with nearly all other markets, I predict that cocoa will hit new highs during the second part of this bull market. If you hesitated to buy during cocoa's first run-up, don't miss out the second time around. Buy!
5 - The CRB Index
The CRB Index is the smartest way to benefit from gains across the entire commodities market, which now happens to be the most significant bull market we have seen. In the 1980s and 1990s, many people spent too much time searching for winning stocks. In those days, it was practically a free ride to Easy Street to buy into in the Dow Jones or S&P indexes. The CRB Index is the equivalent for commodities. Especially for wet-behind-the-ears investors, the CRB Index lets you benefit from all market momentum without having to specify a certain hot market and investment time. As in all markets, every commodity market can see-saw, but in general the market always moves up. We are in a bull market, after all.
The chance to win big in the commodity markets over the next 5 years is the single greatest investment opportunity that I have ever seen. I do not expect to see another one like it for at least five decades. Do not miss out on this chance to create a fortune that could take all your financial worries away, in the space of just a few years.
Article Source: http://www.kokkada.com
Halston Adams is an ex-broker who had the chance to emulate top traders, giving him the ability to explode his own $8,000 futures account into over $56,000 in 3 years. Find out more about his trading approach at: Futures Trading Secrets today.
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