Hit the Commodity ETF's and ETN's, and Hit Them Hard

This past last 6 months have created havoc in the United States and the rest of the world. The mortgage crisis followed by the financial market meltdown has created a situation of the largest Government bail-out in the history of the western world. The $700 billion Fed print-out *cough cough*, forgive me; Bail-out has produced a ton of cheap money sloshing around the worlds markets. What does this mean? Well for one, Hyper-Inflation.

Now the equities markets won't be very effected by the eroded buying power of the all-mighty greenback, but you will definitely see hyper-inflation in the commodities. And of course, the specifics are Gold, Silver and Oil. But don't kid yourself, the other commodities will be very lucrative in inflated gains.

Now, myself, I don't trade the actual commodities. My interests lie more in the ETF's and ETN's which follow the commodities. Specifically, the option call's of these securities. As always, do your homework, find the right strikes and profit.

(NYSE: GLD, SLV, DGP AMEX:USO)

And as always, the producer's of the commodities aren't a bad bet either, but be prepared to go the long distance.

Happy Trading.

NEXEN - Premium Synthetic Crude to Begin Production Any Day

Nexen Inc. (NYSE:NXY, TSX:NXY), a large energy producer based in Canada which has a massive stake in the Long Lake Project in Fort McMurray looks to complete it's new Upgrader asset. As of September 2, 2008; a press release from Nexen revealed that the Long Lake project was moving along on schedule and that 90% of the upgrader to their extraction and processing asset's were commissioned and eluded that the upgrades would be complete by the end of the month.

We are coming to the end of the month and I look everyday for news of completion. This Upgrader will allow Nexen to begin it's first production of it's Premium Synthetic Crude product. All resources and materials for production are all procured and allocated to begin production the the new energy product and is believed by analysts to raise the price of Nexen in the $30-$35 range.

The best bet is to look at the October and November Calls to best position one's portfolio to benefit from this growth.

Further Rally In AIG and it's Calls

News released Sunday of AIG's major share holders efforts to raise capital and purchase the Government's 80% stake in the financial firm is already affecting AIG's bids and asks this Sunday evening. As of 10:36 MT, the stock is poised for a gap of 20 cents for tomorrow's market open and I anticipate it to raise further as we approach the market open for Monday.

My interpretation of this action is that obviously the shareholders don't want the shares to be diluted by that 80% stake but it also shows me that the company is worth not handing it over to the US Government and to keep the power with the shareholders.

The Calls of AIG between the 5-7 strikes look to be of particular open interest and look to perform very well tomorrow.

Keep an eye out for AIG.

Government Bails Out AIG With $85 Billion Loan

Another informational video of AIG's take over. Just an additional weekend video for your viewing pleasure. Look for a new post Monday. Have a great weekend.

Treasury Rescue Plan: Bad Medicine

An interesting video of the recent activities of the U.S Government whith regard to the financial meltdown. Enjoy!

AIG and SPY Call's

During the trading day today, I was able to find a nice little opportunity which was an obvious no brainer on AIG (NYSE:AIG). The October 5 Calls were especially active on AIG, opening today at $0.50 gapping up from the $0.24 PDC and reaching a high of $1.08 and ending the trading day at $0.91 with massive volitility throughout the day. There were plenty of profit-taking opportunities for traders.

As well, Calls on SPY performed extremely well for investors with Friday's rally.

Overall, plenty of gains for investors to earn back from the financial crash earlier this week.

Oil and Commodities Tumble.....

*Sorry for the late post folks. I have unfortunately been sick extending my labor day long-weekend further than anticipated. I do try to at least post once daily but I let the ball slip.

On Tuesday as most of you are well aware of, Oil prices fell to a new five-month low, allowing the $100/barrel.

The demand side of oil fell as supply fears were extinguished as Gustav only affected the perimeter of the Gulf's 'Oil Patch' and drove the prices of oil further down. Although terrible for investors, I am thankful that a Katrina level incident did not repeat itself and cause as much hardship for the people of the American south.

As of now, Oil production in the Gulf is still shutdown as part of the preparations to minimize Gustav's damage to the energy facilities if the hurricane were to occur as forecasted.

Oil and commodities including Gold fell on additional news of global economic output falling. Economic slowdown in the America's and Europe will hinder demand for oil and has caused investors to pull out of the commodity and energy sectors around the globe.

In addition to the above, the greenback gained strength versus the euro and other western currencies driving demand for Commodities measures in USD down.

Overall, as energy traders on Tuesday drove down prices via mass exodus of the markets, it is apparent that they are going to keep their eyes on the following tropical storms to come.