How to make Money in the Stock Market.This blog looks at how you can make money trading and investing in Forex, Stocks Options and Futures.


Wednesday, 27 December 2006

Mkt Update-2007 View

US mkts moved slightly higher on thin volume-The Dow Jones Industrial Average (DJIA – 12,407.6) added 64 points, or 0.52 percent, as it bounced off support at its 20-day moving average The S&P 500 Index (SPX – 1,416.9) jumped 0.44 percent, bounding off its 20-day trendline. However, the broad-market barometer remains below its 10-day trendline. Meanwhile, the tech-laden Nasdaq Composite (COMP – 2,413.5) increased 0.51 percent, but remains below both its short-term trendlines.

Nothing really much is happening and it is unlikely to in the short term-Friday may show some wild swings as there is some manouvering for Yr end-I am still big next year on Commodities and Energy.I have attached some commentary giving some background to this rational.

In 2007 I think crude oil will move upwards again and above $70-$75 a barrel there is a strong possibility it could consolidate most of the year north of $80.Natural gas, still in a downtrend since the beginning of the years highs, will also perk up and start to trend higher. I believe that exposure to commodities especially energy is the place to be. I am considering the iShares GSCI Commodity-Indexed Trust (NYSE-GSG) for 2007. GSG now trades right at its 52-week low, down 17.4% in 2006 and off around 22% from its high if I am right in my expectations then this could be a great medium term hold.
The GSCI currently holds 69.2% in energy futures, 13.1% in agricultural commodities 10.8% in base metals, 4.6% in livestock and 2.3% in precious metals.If you are looking for an index that has good diversified exposure to the commodity sector then this may be one worth researching.

Best Wishes and Good Trading