Bastard From a Commodity Basket

Without question natural gas is the bastard child in the commodity world, an endless heart-breaker or, as some say, a widow maker, due to its constant fake-outs, rollovers, and general disappointment for years on end. 

Case in point: Just today, with oil and gasoline moving higher off the weekend news of rejected peace offerings, silver spiking higher, and soft commodities also spiking, you see very few folks even acknowledging natty gas hitting multi-week highs. After all, how much heartbreak can one take before giving up altogether?

Be that as it may, one instructive point we have repeatedly noted with Members is that natural gas-related stocks have actually performed quite well this spring, even as the underlying commodity has done nothing but meander lower since a spike higher in late-January. Individual names housed in the XOP ETF have natty-exposure and some are quite impressive, be it KOS or SM, the latter on the daily chart, below, basing tightly in the context of an uptrend. 

While I recognize the only way that natty gas itself can silence the many naysayers out there is in the form of a bonafide and sustained rally, perhaps the natty-related issues are telegraphing a glimmer of hope for this summer. 

Elsewhere, semiconductors continue to set records for being historically stretched on a daily basis. Should Warsh take over as Fed Chair this week, which seems likely, the setup certainly seems viable for markets to put new Fed Chairs to the test right away in the form of market volatility. It would be just like Powell to hog all the luck and leave everyone else holding the bag.