Oil Shock

Natural Gas Monthly Chart

Crude Oil Monthly Chart

A McKinsey report says that an oil shock is inevitable. How can you profit from this if it happens?

One way is to buy crude oil ETF/ETN or to invest in companies in the industry. Another is to buy natural gas because it is another energy source.

You can buy natural gas ETF through UNG. Look at the charts for crude oil and natural gas. You can see that natural gas price continues to stay low while crude oil has rallied almost 70% from its low. For those that like bottom fishing, I think that UNG is a good investment. The price should turn up when the emerging markets can grow their economy without relying on the Western countries consumption.

AVI Biopharma, Inc. (AVII)

AVII Weekly Chart

Bought AVII for my swine flu play. It has broken the downtrend line.

PowerShares DB Gold Double Long ETN (DGP)

DGP Weekly Chart

Gold has broken the falling flag pattern twice. Good chance to challenge 1000 again. This time it may break. Bought DGP.

Gold Bugs

People say gold is a good hedge against inflation. For me, gold is just another commodity that is subjected to speculation. It is no different to crude oil, silver or wheat.

The current theme play in the world market is against the USD. As the government prints more money to rescue their banking system, demand vs supply law says that the USD value will drop. The last time USD drop, every commodity that can be traded rose. The chart evidence shows that USD is dropping again. Well, you all know that the crude oil is now above USD60.00.

So, if you like to play gold, I think that the odds favors it to go to USD1,000.00 again. Gold has tried twice to break above USD1,000.00 but not successful (see the attached 30-year gold chart). If it is not successful this 3rd time, gold may drop to USD700.00 again.

If you want to invest in gold, you can do through the following ETF in the US: IAU(USD92.29) and GLD(USD92.25).

For me, I will buy the ETN: DGP(USD20.41). DGP is designed to return 2x the performance (up or down) of gold. Remember,ETN is like ETF but more risky. Stop loss for DGP is USD17.50.

Passing the baton to emerging markets

Marc Faber says that the economic leadership is now in the process of being passed to the emerging markets. That is why we have so much distruption in the market. Read the story here.

iShares Silver Trust (SLV)

SLV Weekly Chart

SLV has broken from a descending flag. Should challenge the downtrend line soon. I'm long SLV.

Direxion Daily Financial Bull 3X Shares (FAS)

FAS Weekly Chart

FAS is trading within a channel. RSI and Stochastic shows that it got potential to go higher. Daily chart gave me a buy signal. I'm long FAS.