During the last stock-market top in 2007-2008, the price of natural gas completed a basing pattern (bottom) and broke out and had a massive rally. Will that happen again this time around?
Based on the stock-market stage analysis, market sentiment and the price action of natural gas, it appears the stock market is topping and that natural gas is on the verge of a breakout and rally.
The price of natural gas moves in strange ways, which I mention when it takes place. I've found that when there is fear in the stock market and stocks are down -- along with almost every other asset class (this is rare) -- natural gas is typically the only asset and/or commodity trading higher. I’m not exactly sure what to make of it, but I have seen this repeatedly over the years.
See the weekly chart below of the S&P 500 index and natural gas.
Natural Gas Forms Bottoming And Basing Pattern
Natural Gas Trading Conclusion
In short, whether or not this correlation between stocks and natural gas exists, the fact of the matter is that stocks are showing signs of a significant top, while natural gas appears to be bottoming.
In the coming days, several swing trade and long-term opportunities will present themselves and I'll share which ETFs and or stocks I will trade to profit from the pending moves.