New York
London
Tokyo
My 2 Cents
A Trading Metro Member Blog

Commodities Crash: Buy Levels Revealed

The markets are down again today. The selling is not massive but it is the third drop in a row. The SPDR S&P 500 ETF (NYSEARCA:SPY) is trading at $121.79, -1.32 (-1.07%). The big driver to the downside today is clearly commodities. Almost every single commodity is dumping sharply. Everything from oil to gold and silver. While these drops are massive, smart investors and traders are starting to look for the buy level.

Oil is coming off a massive run-up recently. The United States Oil Fund LP (ETF) (NYSEARCA:USO) is trading at $36.93, -1.68 (-4.35%). This is a massive drop as spot crude is down well over $4.00 per barrel. Support levels on the USO are tricky because the commodity is still overbought. The first level that looks attractive on the USO is the 50 moving average at $36.35. This level will be a short term oil bounce level but is not a long term buy. The term used to trade this level would be swing trade. The following major support on the USO is $34.50. This would be the longer term hold level.

Gold is plummeting. The SPDR Gold Trust (ETF) (NYSEARCA:GLD) is trading at $153.32, -5.13 (-3.24%). As central banks dump gold and raise cash, pressure on the commodity is strong. In addition, the Dollar of late has surged dramatically higher. This also puts major pressure on the precious metal. The first support level on the GLD is $149.50. After a small bounce, expect the GLD to head to $144.00. This should be a longer term bottom.

Silver, like gold is under major pressure. iShares Silver Trust (ETF) (NYSEARCA:SLV) is trading at $28.09, -1.73 (-5.80%). SLV hit some minor support today at $27.40. This may give it a day or two bounce. However, more downside is likely before all the selling concludes in mid 2012. The next major support on the SLV is $26.10 with the longer term buy level at $24.25.

Gareth Soloway
InTheMoneyStocks.com

Tagged as: , , , , ,

SocialTwist Tell-a-Friend

Leave a Response

Trading Metro
Disclaimer

Before diving into the legalese below, use your common sense when trading. Rely on yourself to define trade execution, don't trade with money you cannot afford to lose, and know the risks of trading. Be responsible, be honest, and use common sense.

Online trading, especially that on margin carries a high level of risk and may not be suitable for all investors. Opinions expressed at Trading Metro are those of the independent authors and do not necessarily represent the opinion of Trading Metro. Trading Metro has not verified the accuracy of any claim or statement made by any independent author. It's your responsibility to ensure the veracity of information presented.

Any solutions, opinions, news, research, analyses, prices or other information contained on this website, by Trading Metro, its employees, partners or contributors, is provided as general market commentary and tools, and does not constitute investment advice. Trading Metro will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Information on Trading Metro is NOT a recommendation or solicitation to buy or sell any securities. Your use of this and all information contained on Trading Metro is governed by the Terms and Conditions of Use. Please click the link to view those terms. Follow this link to read our Editorial Policy and our Privacy Notice.

Feedback Form