Fonte: Benzinga
Natural Gas
If you have been reading my work over the past year you should know I don't like
natural gas. More people have lost money trying to play natural gas than any other investment vehicle out there which is why I don't cover it very often. Many of you have been asking about Natural Gas (
UNG) so here are my thoughts on it.
UNG has been in a down trend for several years and the only trades should be short positions at this time. The argument from some is that it's undervalued and with winter just around the corner prices should go up. It's a valid argument but price action is what makes traders money, not fundamentals.
The daily chart of Nat Gas below shows what I feel is about to happen. Remember, UNG is a terrible fund to be buying. Unless natural gas is moving strongly in your favor, this fund continually loses value simply because of the way its created.
Looking at the actual natural gas commodity chart is a different story… The trend is still down, but it does look as though it's trying to form a base when looking at a 3 year weekly chart. That being said, there is still a very good chance we see gas test near the $3 level before starting a new trend so trying to pick a bottom here is not something I would be doing.
Trading Conclusion:
In short, the equities market is still in a strong uptrend. I'm not comfortable taking any large positions at this stage of the game but if we get a setup I will not hesitate to enter with a little money.
As for natural gas… trying to pick a bottom is deadly in a down trend as bounces tend to be short lived or flat.
I will cover the dollar, gold, oil and the market internals in the member's pre-market morning video…
Happy Trading
Chris Vermeulen