Buy & Hold Commodities?

The DBC commodity ETF was listed on the AMEX at early February 2006, interestingly after a little more then a year the thing has gone nowhere!

Anyone who bought the DBC at the IPO has seen little to no returns while at the same time nimble traders had several long & short trading opportunities.

At the same time (February 2006 – March 2007) the CCI which is a broader commodity index have gained around 10%.

That’s made me thinking - Did Deutsche bank picked the wrong commodities?

Technically:

The DBC is near the 50 / 200 Moving averages and the 50% Fibonacci level. RSI is trending down below 50. The PPO is negative but still above the zero line.



CCI(NYBOT) long term chart

Aluminum Chart (COMEX: AL)

Between the second quarter of 2005 and the Second quarter of 2006 the price of aluminum climbed about 66 cents per pound (0.79$ - 1.45$) for an 83% nominal gain. Note that the price took shape of five wave pattern. According to Elliott waves analysis once a five wave pattern is completed a three wave counter trend should be expected (A, B, C). I estimate that wave (c) is currently underway and a lower low then (a) should follow. The RSI indicator is trending down below 50 and PPO is slightly negative.

Crude Oil – Update.

Interesting situation, crude May futures contracts are up about 10$ from the year bottom. The price is out of the sharp downtrend but facing horizontal resistance from current level all the way to 66$. (The 50% Fibonacci line).