The stock market is like roller coaster this week, shooting up and plunging down with a huge price movement on a daily basis. Hope you did buy some protection as I recommended last week. This is a trader's market and I wish I had time to closely follow the market and do some day trading. But I didn't. Actually I was in Switzerland tied up with meetings.
One thing I notice these days is the uptrend of natural gas. Four years ago, natural gas was priced at around $9 per million British thermal units (BTU). This was way too expensive for most electricity needs. However, due to significant advances in drilling techniques in the past 10 years in the US, natural gas can now be extracted from shale-rock formations, which has made US an extremely rich country in natural gas resources. As a result, natural gas prices dropped below $2 per million BTUs last year. As I said one year ago, natural gas price would not stay that low for long and eventually it would go up again due to cutback of production coupled with increased usage of the cheap natty. Well, natural gas is back to $4 now. I think there is still some room for natty to go further up in price as part of its long term uptrend. The next price target may be $4.5 per million BTUs. However, it has advanced a bit too fast lately and it is normal that it may first come down a bit. If this indeed turns out to be the case, I would be very interested in the leverage ETF, BOIL (ProShares Ultra DJ-UBS Natural Gas).
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