In yesterday's edition, we wrote about the major new low in the CRB Index, a widely followed gauge of commodity prices. The benchmark raw materials index is trading at its lowest levels since July 2009.
One of the major "drags" on this index is crude oil. Just weeks ago, the black stuff traded for $88 per barrel. It now goes for less than $70 per barrel… a stupendous short-term decline of more than 20%. Gold, copper, and platinum also plunged.
The raw material you won't find on the list of losers is one we've been writing about a lot lately: natural gas. As you can see from today's chart, the clean fuel has actually gained a bit over the past few weeks.
This bullish action from the contrarian's commodity demonstrates one of the greatest trading techniques known to man: Go long assets after they've been "blown out" and left for dead. This allows you to buy value and safety. In "natty's" case, the fuel has declined from $12 per thousand cubic feet in 2008 to its current price of $4. When the commodity selloff hit, gas was already lying left for dead in the corner. It simply said, "I'm already down and out. I can't lose anymore… Go pick on the other guys."
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