Commodities Comeback

Friday, 22 Feb 2008 | 10:17 PM ET

What's your next move as crude hovers near $100 and gold and platinum hit new highs?

Esteemed investor Dennis Gartman, author of The Gartman Letter, joins the panel for this conversation. Following is a summary of his main points.

Tomorrow's Trades #1
Playing commodities, with Dennis Gartman and the Fast Money traders.

What do you make of oil?

It looks like oil is breaking out to the upside, says Gartman. Everyone thought it was going to top out at $100 including me. But the fact that it’s broken though to the upside suggests it could carry on higher.

I think it’s a text book break out, he adds. A friend of mine used to say, “Do the hard trade,” and the hard trade is to own crude oil. It’s a classic text book break out.

And what about gold?

I’m still long gold and short of stocks; one against the other. It’s been a good trade, he replies.

Thoughts on copper?

I got killed in copper two years ago, being short Phelps Dodge. So, like Mark Twain’s cat I don’t sit on the same hot stove, twice! But it looks like a break out and if I had to do something, I’d buy it.

Why are commodities moving higher in the face of a US economic slowdown? Shouldn't they be sliding?

That’s a conundrum, Gartman says. The fact is, we simply don’t know the reason. But the price tells us that the trend is up. If you’re trying to be short of it, you’re probably on the wrong side of the trade.

I think we’ve de-coupled from the rest of the world, he adds. Elsewhere demand is strong. We might be learning that demand from the rest of the world trumps that of the United States.

What’s your best trade?

Be long of gold and short of US stock market, Gartman replies. And be long of platinum and palladium and short General Motorsbecause there’s a shortage of these metals needed to make catalytic converters.

Got something to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap! Prefer to keep it between us? You can still send questions and comments to fastmoney@cnbc.com.

Trader disclosure: On Feb.21, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Macke Owns (INTC), (YHOO); Seymour Owns (AAPL), (CSCO), (F), (MSFT), (S), (TSO), (SBUX), Seygem Asset Management Owns (CCJ), (TIE), (GAF) Seygem Asset Management Is Short (EEM); Finerman’s Firm is Short (IYR), (IJR), (SPY), (MDY), (IWM), (LEH) and Owns (LEH) Puts; Finerman’s Firm Owns (VLO), (TSO), (MSFT), (KSS), (JCP), (AAPL), (TSO), (VLO), (YHOO), (WMT), (MO), (AEO); Finerman Owns (GS); Dennis Gartman Owns (CIM), (COIN), (PRB), (SID), (PAL), (UNG), (GLD), (UUP), (SWC), (HOV), (GWR), (GMO), (SDS); Gartman is Short (SDS), (COH), (HOG), (RTH), (MMM), (GM), (DCR), (AAPL), (DRYS), CIBC; Gartman Index Owns Gold, the EUR, the Canadian Dollar, Sugar

  Price   Change %Change

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.

  • Guy Adami is a contributor on CNBC's "Fast Money." He also is managing director of stockMONSTER.com.

  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

Halftime Report

  • Jay Yarow, The Business Insider, and Steve Milunovich, UBS, discuss whether Tim Cook is to blame for Apple's drop in growth. I think it's pretty clear they missed the big phone market and overestimated the success of the plastic 5C phone, says Milunovich.

  • CNBC's Eamon Javers reports on Bill Ackman's stake in Allergan. Javers says this is a classic case of insider trading that is not against the rules.

  • FMHR trader Josh Brown thinks Dunkin' Brands looks fantastic technically, while Mike Murphy says investors are questioning the company's massive expansion plans.