Wed 4/11/12 4:29 PM – US Stocks Bounce, Nat Gas Near Total Collapse

Stocks were higher today, about 3/4% on the S&P 500. That was in line with Europe. Asia and South America were mixed – some markets higher, some lower.

If there is any doubt that the US is heavily focused on Europe, consider that the S&P 500 index is moving almost in lock-step with the Italian bond market which has been moving lower.

To see that look at the last 2-3 weeks and compare SPY and ITLY. You can do that on Google Finance. Get a quote on either symbol and type the other into the compare box, then select something like 1 month view and you can compress or expand the time span by clicking on the chart and scrolling with your mouse wheel.

Gold was about flat, bonds were mixed, the dollar was down slightly. Oil was up 1.4%.

Natural gas broke below $2 today, a price not seen in many years. Natural gas prices are off more than 40% since Jan 1 and about 90% over the last four years! That is just about a complete collapse, thanks to new drilling techniques that have caused supply to mushroom.

I am starting to get very interested in nat gas and the natural gas companies which are down quite a bit but not nearly as much as the commodity. My favorites right now are Encana and Chesapeake.

Today’s stock market action was not impressive. There was no follow-through on the initial rise and prices did not finish near the highs for the day. I look for lower prices, near-term.