The CRB is now just 2% below a multi-week high. Given the broad based strength in commodities and the material weakness of US Treasuries we are confident that the CRB will break above resistance at 245 over the coming hours. We have been waiting for Natural Gas to break it’s down trend and it now appears to have done so (albeit in the process of). We are placing an order to buy UNG tonight via long term call options.
There is one stock, Chesapeake Energy (CHK) that has a big exposure to natural gas and we see significant upside in CHK over the coming months:
The strength in Gas and Oil last night pushed the energy ETF “DBE” to a multi-week high. Now we have both energy and base metals at multi-week highs. All we await on now is Agriculturals (DBA) and Precious Metals (DBP) to break to multi-week highs.
We continue to believe that a significant rally in commodities is about to get into gear. There are lots of ways of getting exposure to commodities, we prefer the ETF “DBC”
