“Mrs. Black Bear???” I wondered out loud.

“Yes,” she giggled. “Sean ‘Black Bear’ Broderick is my husband.”

That’s Sean Broderick, editor of the Secret Order of Jurojin. For those of you that don’t know, the Secret Order is an exclusive commodities trading service and Sean is a nationally acclaimed commodities experts.

What I like about Sean is that he never hesitates to admit a trade gone wrong. “I got killed on sugar last week,” he confessed. “The India government announced that they won’t be exporting sugar, so I loaded up on calls. Then they changed their minds.”

I’ll tell you about Sean’s trades that did work out, but first here are his views on the commodity market…

“China and India get more of our money every day to spend on cars, refrigerators, air conditioners…all things that require steel and copper, zinc and nickel.

“Therefore the supply demand crunch in metals and energy is getting worse.

“Global warming will light a fire under energy prices,” says Sean. According to him, global warming affects the economy in so many ways we don’t even realize. Everything from water prices to what we will pay for our homes will go up because of global warming.

Sean is bullish on literally every commodity out there. We are in a commodity supercycle, just like the one soon after World War II. You see, right after World War II, Europe and Japan were flattened. They needed to rebuild. And they went shopping for every commodity that ever existed. The result: Prices went up. The same thing is happening now with China and India.

Demand is coming from all sorts of corners. For example, 24 million Indians will be buying their first cars in the next few years. You read that right – 24 million! Imagine how much more commodities demand will go up!

“The U.S. is also demanding commodities,” says Sean. “People talk about deep recession here, but that wont happen. We’re growing GDP at about 6%. Imagine what it will take to turn that around and go into recession? The U.S. has enough resilience. And even if things went bad, the global economy is at the best place to ride out a recession.”

According to Sean, the supply-demand gap in commodities will take at least seven years to bridge. That means climbing prices till then.

Sean also likes oil and natural gas, heres why:

• Major oil fields are on the decline
• Power plants in the U.S. are actually using natural gas to make electricity!
• China’s oil use increased 17.6% year over year

That brings us to how you can profit from the great commodities boom. Here are some of Sean’s trades:

• It won’t be surprising if oil hits $100 a barrel by next June. So buy crude oil calls. Specifically, Sean like the June 2007 crude oil calls with a strike price of 100 at $140 or better.
• A great alternative to this trade is the U.S Oil Fund ETF (USO: AMEX), which holds crude oil futures.
• “Be bullish on gold. It will hit $870 by year end.”
• Sean’s target for silver is $20. Chinese silver demand continues to be strong. Silver Wheaton (SLW: NYSE) is a good way to be long on silver.
• As for currencies, Sean likes the yen. He also forecasts that the Australian central bank is coming under pressure to cut its rates. So the Aussie might fall. “Sell the Aussie, buy the yen” is his advice.

We are at a time and age in which commodities play such an important role in global economics that they are shaping history. “Would we be so interested in the Middle East if they didn’t have oil?” asks Sean. The good news is politicized commodities tend to stay on long and sustained uptrends.

Regards,

Sala Kannan
July 28, 2006

Hot Commodities and a Cool Head was originally featured in the Penny Sleuth.