Market Vectors Coal ETF (KOL)

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BY JOHN MURPHY bullish on coal.
COAL ETF IS ALSO HAVING A VERY STRONG YEAR... Speaking of rising commodity prices, I've been writing lately about commodity stock groups that have been doing very well, including metal and mining stocks tied to base metals and steel. Coal stocks are doing even better. Chart 6 shows the VanEck Vectors Coal ETF (KOL) surging almost in a straight line since January to the highest level in eighteen months. The group has doubled in price since the start of the year (as has the price of coal). That comes as a surprise to me because I thought the coal industry was dead. Apparently not. An article in Investors Business Daily this morning explained some reasons why the coal industry is starting to improve. First, a recent court decision offering some relief on the regulatory front. Second, rising natural gas prices are making coal more competitive (see gray area). And third, rising coal demand from China. A big part of that foreign demand is coal that is used to make steel. That's just another sign that commodities, and stocks tied to them, are back in favor. The new inflation trade explains why investors are selling Treasury bonds and moving money into TIPS.