Buy, Buy, Buy??
With this so called "melt down" in commodities right now, you should be really thinking about buying instead of selling.
Why? Because everybody is scared and panic selling.
The media is doing its part by proclaiming the commodity boom is over and everything is going to go down.
I highly doubt it. Nothing is impossible of course but our supply-demand situation is still out of whack. China and India are still building and creating a new middle class with much money to burn on luxuries that require value commodities.
Keep in mind that the people (contrarians) who will always make the most money are those who do the opposite of what the masses and media are doing.
Don't expect to be able to perfectly pick the bottom of this "blowout". To play it safe, perhaps wait until commodities are bouncing up 5-10% off their lows are starting a (possible) new uptrend.
Now my previous comments were related more to trading commodities directly. Many of you probably don't have such capabilities and/or don't want to trade commodities.
I myself (out of personal preference) trade only junior resource companies. With these, I have found great success using a very simple strategy:
-Buy when the chart is flat and there is no news.
-Sell on the news or one day after.
Using this strategy you can often get 20% on the trades quite consistently.
While it is very simple, it is also very hard.
How?
Because you yourself are your worst enemy. When the stock jumps 20% in one day, you are thinking to yourself "why should I sell now? it's going higher."
Sometimes it does go higher, but in most cases, I see the stock drop significantly soon after the news.
This strategy also takes a lot of patience because it often takes a long time for the company to release news.
But it works profitably for me so I am sticking to it for a while.
I just bought my first position today in a junior uranium explorer that holds a huge land position in the most prolific area: the athabasca basin.
It's been trading at 0.50 for a while now and I think it is setting up for a pop sometime in the near future. If all goes as I think it will, I'll take my ~20% on the news pop and look for the next opportunity.
(I would tell you what it is except for the fact that I don't want a pop beforehand. I will tell you what it was after I sell and then you can study it and find your next trade on your own.)