Utilizing IBD Ideas for Commodity Related Investing

Daryl MontgomeryOrganizer, New York Investing meetup

http://investing.meetup.com Copyright 2008 – All Rights Reserved

The Big Picture for Bull/Bear Markets

• Secular (long-term) Bull/Bear Markets alternate between Stocks and Commodities

• Secular trends last for about 20 years.• Secular Stock Bull from 1982 to 2000

Secular Commodities Bear from 1980 to 2000• Secular Stock Bear market from 2000 to ?

Secular Bull Commodity market from 2000 to ?• Long-term trends favor commodity investing (not necessarily the

stocks) for the foreseeable future.

The Previous Secular Stock Bear/ Commodity Bull

• Took place between 1966 to 1982.• Period of rising and high inflation/ declining dollar. • Dow hit 1000 in 1966, 1968, 1972 and 1982;

had the biggest sell off in 1973/74.• Oil prices went from $3 a barrel in 1972 to $12 a barrel in

1974 to $40 a barrel in 1980. • Gold went from $35 an ounce in 1972 to $195 in 1974* to

$875 an ounce in 1980.• Silver went from $3 an ounce in 1972 to $10 an ounce in

1974 to $50 an ounce in 1980.• Nixon devalued the U.S. dollar by 10% in 1973.

The Current Secular Stock Bear/Commodity Bull Market

• The S&P 500 hit 1500 in 2000 and 1500 in 2007.• The Dow and Russell 2000 hit higher highs.• Oil hit $40 in 2004, $103 in March. • Gold hit $875 in January.• Silver’s high is $21. • A number of food commodities have hit all-time

highs . • The U.S. dollar lost 10% of its value between Sept

2007 and March 2008.

You can invest in Commodities with ETFs -List of Inflation Hedges, No Equities, Long

• Gold – GLD, IAU, DGL, DGP(200%)

• Silver – SLV, DBS

• Precious Metals – DBP

• Food – DBA, JJA, EOH, RJA

• Oil – UCR, OIL, DBO

• Energy Complex – USO, DBE, JJE, RJN

• Natural Gas - UNC

S&P 500 10 Year Monthly-Long-Term Sideways Trading

Dow Jones 10 Year Monthly –Testing Break Out

Nasdaq 10 Year Monthly –Bubble Top, Secular Bear

SP500 One-Year Daily –Bear Market Pattern

Dow Jones One-Year Daily –Bear Market Pattern

Nasdaq One-Year Daily –Bear Market Pattern

U.S. Dollar – All Time Lows

GLD One Year DailyBull Pattern

SLV One-Year DailyBull Pattern

USO One-Year DailyBull Pattern

DBA One-Year DailyBull Pattern

GLD -3 Year WeeklyFlat Base with Breakout

SLV 1 Year DailyFlat Base with Breakout

USO 3 Yr Weekly –Cup, Handle, High-Volume Breakout

DBA One-Year DailyFlat Base