Will New Regulation Drag Down Commodities?

On Wednesday investors were wondering if money was about to rotate of out commodities due to an impending new regulation.

Specifically the CFTC voted to crack down on traders and curb bets on a slew of commodities – most notably oil .

Although the details are somewhat complex, in a nutshell the new regulation will limit the number of futures contracts any trader can hold.

Considering it’s a regulation that Wall Street has strongly opposed, your knee-jerk reaction may be to expect a decline – but trading pro Dan Dicker of MercBloc says not so fast.

”This kind of thing won’t do much,” he says. “And it will probably be challenged so I suspect it will be a long-time until this rule gets implied into the marketplace. I’d forget about it for the near-term.”

In other words, Dicker thinks there’s almost no worry that it keeps even some money from flowing into commodities.

So much for your short trade - but we'd never leave you hanging. We asked Dicker for another idea and he suggested long RIG.

”They control about half of all deep water rigs out there,” Dicker says. “At $50 I think it’s under valued.”

Also he suggests putting Chevron on the radar. He’s looking for the company to make an acquisition in natural gas. If and when that happens, “It could move the needle,” he says. “The street loves to see M&A activity in the space.”

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Trader disclosure: On Oct 19, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Seymour is long AAPL; Seymour is long BAC; Seymour is long INTC; Seymour is long NOK; Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Finerman owns AAPL; Finerman wons JPM; Finerman’s firm owns JPM leaps and puts; Finerman’s firm owns AAPL and short calls; Finerman’s firm owns IBM and short calls; Finerman’s firm owns YHOO and short calls; Najarian has AAPL call spreads; Najarian has GS call spreads; Najarian is long RVBD; Najarian is long Long CIGX; Najarian is long CME; Najarian is long CBOE

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