Natural gas has crashed when comparing it to the DBC commodity ETF.
If a recession takes hold, demand destruction always prevails and it looks like Nat gas is pricing this in.
This price action could be a leading indicator that many other commodities may be vulnerable to a pullback.
Since Natural Gas is one of the smaller components of this ETF, it can see a large influx of capital that has to stay long by rotating out of other overbought commodities. Natural gas has broken out before the DBC and it has bottomed before the DBC. Nat Gas has the largest divergence from its peers.
If a recession takes hold, demand destruction always prevails and it looks like Nat gas is pricing this in.
This price action could be a leading indicator that many other commodities may be vulnerable to a pullback.
Since Natural Gas is one of the smaller components of this ETF, it can see a large influx of capital that has to stay long by rotating out of other overbought commodities. Natural gas has broken out before the DBC and it has bottomed before the DBC. Nat Gas has the largest divergence from its peers.