The oil to natural gas ratio is at an extreme level not seen in at least 15 years, reports market technician Martin Goldberg. Martin is an astute market observer who I recently discovered on the Financial Sense Newshour.
With oil above $71, and natural gas below $4, you’d think that something has to give. Sure, we may be swimming at natural gas, but we also know that the cure for low prices is low prices. There’s not much downside to natural gas at these prices, just a hair above its cost of production.
If you’re interested in playing a pair trade, you could go long UNG, and short…isn’t their an equivalent for oil? My friend and I were perusing ETF’s for oil last week, and he wasn’t able to find anything that wasn’t double leveraged. Any suggestions?