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Oil’s Big Fail Is Distracting You From the Real Opportunity


We've all seen the pictures and surely know how time consuming and hard it is to clean up after an oil spill. And if you ask JC Parets, the founder of Eagle Bay Capital and senior editor of AllStarCharts.com about crude oil futures right now, he'll tell you to turn your eyes elsewhere if you want t0 find a real hot commodity right now.

"Oil itself is all over the place. The chart is a mess," Parets says in the attached video, in which he describes the recent slump from $100 as a dramatic failure. "The major trend we need to follow isn't 0il, it's oil versus natural gas."

When natural gas dipped below $2.00 in April, he says it may as well have "been left for dead." Part of the reason he prefers the natural gas story is because it is still so far below its historic 10-year average relative to oil of about 10-to-1 before soaring to 54-to-1 in the spring.

"That was out of control and that ratio has been crashing ever since," he says, calling the low price of the country's most abundant energy source ''a generational low."

At the same time he says other energy sources like coal are worth a look too, particularly since the low price of natural gas has had a dramatic impact on coal demand as power plants converted their turbines to the cleaner fuel.

"If we're right on nat gas and continue to see higher prices, I think we should continue to see higher prices for coal as well," he predicts, adding that investors should stay away from crude since there are better places to be.