aily ETF Spotlight: UNG (Natural Gas) making new lows for the year, price action continuing to deteriorate -Update
Natural gas continues to be weak and the fundamentals show no signs of improving. There is a huge amount of natural gas production online and not nearly enough demand to keep up with it, even at these relatively depressed prices. It also appears, based on price action, that there is investment money that was put in during oil/natural gas boom that is still working its way back out as stops and pain thresholds are reached on a daily basis. On top of the weak action in natural gas (futures), UNG has it's own set of problems because it has to roll forward its holdings of natural gas futures every month and there has been a steady diet of contango (higher prices on contracts that expire in later months) This means that they are constantly selling a lower priced thing and buying a higher priced one... a recipe for disaster. My advice is to stay far away from this ETF unless you are planning on shorting a bounce of some kind, if it ever gets one. Chart (IDEAS)