Friday, October 17, 2008

Natural Gas + UNG / USO Ratio



the UNG:USO has made a decent jump this week. the ratio now appears like it is approaching some resistance. you see that yesterday it hit the 200 day moving average. plus there's that series of gaps on the chart. I still favor gas over oil for a while, but there is some possibility for a retracement of this ratio.

I'd like to say I Told Ya So, but the price of natural gas itself, which I mentioned at the beginning of the week as being good for a bounce, hasn't really moved yet. but considering the weakness in everything else, it not going down speaks to the strength of this commodity. I like gas here, but a close below last week's low would still be a deal-breaker.