The S&P 500 has done well the past 90-days, as it has rallied by +7.2%.
When it comes to top-performing assets, Natural Gas (NYSEARCA:SPY)has done tons better, as it has rallied over 38% in the same time frame.
As Natty has screamed higher, is blast off about to take place or is it about to peak?
The chart below takes a look at Natural Gas futures over the past 20-years-
Over the long-term, Natural Gas has pretty much stunk it up! Currently is nearly 80% lower than its peak price in 2005. This chart reflects that is is not much higher than the lows of 2012 either.
While it has been doing poorly, could Natty be forming a multi-year basing pattern? It is too soon to tell, yet it remains possible.
The chart reflects that it could be forming a multi-year bullish inverse head & shoulders pattern, with the left shoulder taking place back in 2012.
It could be forming a much smaller basing pattern/inverse head & shoulders over the past few months at (1), with a potential neckline breakout this week at (2).
What would it take to prove this is a long-term basing pattern/bullish inverse head & shoulders pattern? It would take a “huge rally and a breakout of the neckline” just below the $5 level to prove that a long-term basing pattern is actually in play.
In the short-term what is important? That a breakout is in play at a potential smaller neckline at (2) this week!