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

CRB commodity index & DBC commodity ETF

I read a lot of bearish comments about commodities and gold, some even claiming it's a commodity bubble. Let's look at the charts (the facts):

Short term (daily chart) the CRB commodity index is correcting a little bit:

Long term (weekly chart), do you see the trend? , yes it's clearly up:




Deutsche Bank has done a good job with its DBC commodity ETF. Since the DBC IPO (February 2006) the DBC outperformed the CRB commodity index. DBC tracks the DBLCI index (Crude Oil, Heating Oil, Gold, Aluminum, Corn and Wheat)




Investors who don’t trade futures contracts might use the DBC ETF to get direct exposure to commodity prices.

DBC , ( DBLCI ) Deutsche Bank COMMODITY ETF ; update

DBC returns are expected to track the performance of the DBLCI. The DBLCI is a rules -based index, comprised of Crude Oil, Heating Oil, Gold, Aluminum, Corn and Wheat. DBC has passed its IPO price and support is expected ~ 24$ in the case of a pullback, but it can continue to keep going – depending on the underlying commodities. Volume at around 1/2 million shares per day, is still very low and the public interest seems mild.

See Gold (XAU) , Silver (XAG) charts.

Commodity ETF DBC (DB)

DBC returns are expected to track the performance of the DBLCI. The DBLCI is a rules -based index, comprised of Crude Oil, Heating Oil, Gold, Aluminum, Corn and Wheat.

Click on the chart to enlarge:

DBC - More info about the new Commodity ETF

DBC returns are expected to track the performance of the DBLCI. The DBLCI is a rules -based index, comprised of Crude Oil, Heating Oil, Gold, Aluminum, Corn and Wheat. The DBLCI is calculated based on six liquid futures contracts on the commodities comprising the Index. DBC also will generate interest on cash invested in the tracking fund. The indicative value of the DBLCI and DBC will be calculated every 15 seconds and posted to the consolidated tape during the AMEX trading hours.
Read more