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I am an independent investor blogging at Scott's Investments (http://scottsinvestments.blogspot.com/). My site focuses on consolidating and tracking free online investment resources for the public with an emphasis on ETFs, portfolio/trading strategies, and macroeconomics.
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  • Time to Go Long Natural Gas/Short Oil? 0 comments
    Jun 11, 2009 11:58 PM | about stocks: UNG, USO
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    Is it time to short oil and go long natural gas? I posed the question a few days ago and have done a little more digging. The ratio of oil/natural gas prices is reaching extreme historical levels (currently 19.40). Much has been written about recently about the under performance of natural gas relative to other commodities. Tom Lydon notes the ratio is reaching extremes. The chart below from CXOAG shows the ratio dating back to 1976-2008. Note that today we are at a ratio of 19.4






    Now take a look at the 3 year chart:






     


    Bespoke notes that the trading volume in UNG has increased dramatically since March, despite the price of natural gas remaining in the doldrums.

    Putting all of this in historical context, one has to wonder how much more upside this ratio has...

     

    No Disclosure

    Themes: Bespoke Investment Group, cxoag, Natural Gas, oil Stocks: UNG, USO
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CURRENCY TRADING, 200 day EMA, 200 day sma, 60/40, adam hewison, ADX/DMI, afraidtotrade.com, Alexander Green, Alphaclone, alphaclone, Andrew Horowitz, andrew horowitz, Andy Xie, BAC, bailout, Bailout Nation, barrons confidence index, Barry Ritholtz, Barry Ritholz, Baseline Scenario, Bear market rally, Ben Bernanke, Bespoke Investment Group, Bill Fleckenstein, Bill Gross, bill gross, blackstar funds, Bloomberg, Blue Riddge Capital, BNQ, Bonds, Brown Shoots, brown shoots, Buy and Hold, CARS, case-shiller, Cash for clunkers, cash on the sidelines, CBO, Central Europe, chicago PMI, china, China, consumer confidence, consumption, Corey Rosenbloom, crude, Cumberland, CXOAG, cxoag,
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