Today UGAZ Took a Shit on Itself. What’s Next?

Weather is just one reason natural gas cannot gain traction. New gas recovery technology leading to faster supply replenishment capability is also attributing to the decline. I dabble in ETFs UGAZ and UNG. Today either marks the beginning of several more weeks of unhappy longs in either of these high risk ETFs, or the bottom, where those who buy/hold will be rewarded nicely.

Here’s our first problem: The weather.
Things aren’t looking great for a good arctic cold shot through most of December. It WILL arrive, but will that arrival be too late? Time will tell and, as anyone in the weather space will tell you, forecasting deep arctic air accurately past 15 days is difficult. Here’s the latest 16–30 Day forecast from Frontier Weather:

Today though there are two factors that influenced price. This news from Russian Energy Minister:

SANTA CRUZ, Bolivia (Reuters) — Global gas supplies currently exceed demand, a situation that could lead to a “crisis” drop in prices similar to that which occurred in the crude oil market, Russian energy minister Alexander Novak said on Friday.

And the other is typical Black Friday trading trends where lunchtime warriors are in full force for the half-day trading session.

I, like many of you, will be happy to see these ETFs rebound as we get further into the season, however that might be another three to four weeks away.

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