Probably you’ve seen this chart a few times in the last couple of weeks saying that S&P500 is expensive compared to commodities. depgq4xwaaefu7vWell, don’t go and just buy a random commodity… for example, as I wrote, I am expecting gold price to fall. But on the other hand it seems European energies could rally and let me present what I see here. 

Let me start with my dear German (Phelix) power (electricity) futures. German power is a benchmark price for the whole European power, it’s the most liquid and one of the biggest markets in Europe. Cal18 futures contract seems to be breaking out of a very nice multi month consolidation pattern. The price closed trading at 31.84 EUR/MWh which confirmed the breakout if you ask me. One wants to be long if the price is above 31.00-31.50 EUR/MWh.

Very closely linked and highly correlated to German power is European TTF gas. TTF is the benchmark for the continent while NBP is UK gas. Again, Cal18 looks to be forming a nice bottoming formation as well. Confirmation would be a price move above 16 EUR/MWh while below 15 would neglect the view.ttf

And let me finish with EUA CO2 Carbon Emissions, another commodity being linked to both power and gas. We got a daily and weekly close above 5.20 which completed a small inverted H&S pattern with a target of 6.20 EUR/t.

If the price gets there and then also higher, this would complete a major bottoming process, but let’s go step by step.

Could they be telling something what the big boys, such as oil, might be missing, eg could demand be picking up?

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Join the conversation! 5 Comments

  1. […] trading related topics. Thus I would like to remind you to read my post about European energies here. I would also like to share a SunContract’s post below which was originally published on […]

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  2. […] trading related topics. Thus I would like to remind you to read my post about European energies here. I would also like to share a SunContract’s post below which was originally published on […]

    Reply
  3. […] in other, less exposed, energies for example in European energies. Please ready my post about them here. And if the dollar keeps depreciating (read my views about it here), oil prices in local terms in […]

    Reply
  4. […] in other, less exposed, energies for example in European energies. Please ready my post about them here. And if the dollar keeps depreciating (read my views about it here), oil prices in local terms in […]

    Reply
  5. […] the same story was going on with the European energies a year or so ago. Please read my past post where I write about a potential bottom there. And they gave us such a great show this year. I […]

    Reply

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