Day Trading – The Bullz And Bearz

Commodities Trading On Expiration Week

November 11th, 2009

Commodities trading during expiration week and be very tricky. Recently commodities have resumed their rally as Gold futures (/GC) hit new highs yesterday as demand for this precious metal continues. Oil (/CL) and Natural Gas (/NG) futures have traded in a tight range over the past few weeks with no real direction holding for long. Here is a look at the Morgan Stanley Commodity Index (CRX) and where we think things are headed.

As these commodities trade at high levels, underlyings such as Freeport –McMoRan (FCX), Caterpillar (CAT), Gold Miner’s ETF (GDX), and Oil Services ETF (OIH) are also trading at yearly highs. Demand from China and other emerging markets continues to fuel the rise in prices for many of these commodities and stocks. With little market news being released this week, we will turn our focus to next week’s release of the Producer Price Index (PPI) on Tuesday. November Option expiration is 10 days away so next week could be a volatile one – so be careful out there.

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