Commodities crashin'

**Broken Arrow** · 08-15-2008, 11:15 AM

Hmm, the support from the split appears to have lasted only for a few days.... But the truth is, I thought it was a wise move on iShare's part to have made the split when it did. It was hard to ignore Bernanke's hold on interest rates, the subsequent (but tentative) strengthening of the dollar, sliding of oil from its peak, and the somewhat improving market sentiment.

On the upside, while intra-day trading is falling hard, I really doubt it if it'll amount to some kind of crash on the fund. Precious metals will always hold some intrinsic value, and it will always serve as a nice counter-weight to stock's beta. In fact, I think these ETFs in general will probably test along the 2007 levels, which isn't a bad thing. It just means its bull run, at least for the time being, appears to be over. But that's also far from being dead.

To take it a step further, I think those who are already shopping around for commodity ETFs, right now isn't a bad time to pick some up. It's possible that this is a panic sell due the prospects of a market turn-around (which I don't think will happen so easily). In fact, sell volume is way off right now. It's clearly being over-sold.

**Scanner** · 08-15-2008, 11:29 AM

I am sitting on some cash, and I'll admit, licking my lips at the price today.

**sweeps** · 08-15-2008, 11:57 AM

Anything can still happen in the short term, but I stick to my premise that commodities are a loser investment in the long term.

**maat55** · 08-15-2008, 12:14 PM

I took a 2700 beating one time, i'll never go back. Better use your cassino money in that market.

**bankaround** · 08-15-2008, 03:36 PM

I think commodities will slowly start creeping back up once a few more bad news about the US economy comes out later this year.

I'm definitely not hoping for it but it just seems way oversold.

**simpletron** · 08-17-2008, 08:00 PM

I'm going to agree with Sweeps. over the short term (next couple of months) anything can happen, but long term (couple of years) outlook is terrible because all commodities are way above their long term averages. over the next couple of years silver is going to between $5 and $7.

commodities follow what i like to call the mirror trend. they float around the long term average, then a trigger happens which causes the price to increase. the bull runs its course, then down slide back to long term average happens and looks like a mirror image of the run up. a perfect example for silver is 1978 to 1982: $5 in 1978, 40+ in 1980, $5 in 1982. these happen all the time on a smaller scale.

Do you know what the cure for high prices in commodities is?

It is high prices. because commodities get hit with the double whammy of increase supply and decrease demand. supply naturally increases because of at higher prices it is now profitable to go after mining sites that were not profitable, or switch crops. back in 1980 when silver was $40+, supply came out of kitchen cabinets in the form of silverware being melted down. demand decreases from people switching to alternatives and conversing more.

Commodities crashin'