I have found it better to short BOIL and KOLD vs buying the opposite depending on my anticipated direction. Then, I also benefit from the decay. Just thought I’d share. I am currently short BOIL.

The shape of the curve of natural gas futures is usually in contango, where front month contracts trade at a lower value than back month contracts,. As expiration nears, futures traders are forced to pay up if they choose to roll their front month contracts to the next month. This is what the UNG ETF managers are forced to do on a regular basis. It’s much the same as with the volatility ETFs such as VXX or UVXY. The crude oil ETF, USO, on the other hand, restructured the way it owns futures contracts, so that now it owns contracts in various parts of the curve, so as not to be damaged as much from contact rolls.

I’m following Cem Karsan’s idea of “short stock, long calls.” I’m short via micro S&P futures, while owning long 50 delta calls and in various expirations out to December, keeping overall portfolio neutral around 0. I will scale into more short S&P if price continues higher, and I’ll keep purchasing calls to hedge against it. I’m also short some strangles out in October to help fund the call buys. With this setup, I don’t need to keep staring at the screen.
I’d also consider short nasdaq against long Russell and/or Dow Jones.

I am just getting frustrated and tired looking at the price action of broad market grinding higher and higher slowly every day, weeks and months now….

Now my mind is getting corrupted and just wish something very bad to happen that brings the market to its knees!

Thanks Jeff,
I figured the leveraged ETF’s would be funky, but I thought UNG would do a better job than it does.
3% on a 30% gain in the commodity….sounds normal for my portfolio.

Those natural gas ETFs are comprised of front month futures contracts that need to be rolled out to the next contract on a regular basis. They are horrible ETFs and should only be traded as a day-trade or when natural gas is making a large trending move. Better to own natural gas producers if you’re bullish for the longer term. KMI and EQT are a couple that come to mind.

March 29 Nat Gas was 2.00……..Today 2.64…..over 30% higher
March 29 Ung was 6.90……… Today 7.11……only 3% higher
March 29 Boil was 71.60…… Today 62.32….. 13% lower
March 29 Kold was 74.44….. Today 58.52….. 21% lower

With Nat Gas up over 30%, how come UNG is up only 3%
And I can understand a leveraged fund going against Nat Gas being down 21% (although I think it should be more), but how can a leveraged fund be down 13% when the commodity is up over 30% ?
I know there is decay, but not that much ???? Doesn’t seem right.

I was thinking the same thing…
Randy…. Are your longer term trades bullish ?

yes, that will help

My job is to provide technical analysis & trade ideas. Just like fundamental analysis, technical analysis is highly subjective & for lack of better comparison, not so different from Rorschach tests. 10 people look at the same set of charts & all come to different conclusions.

Your job is to decide whether or not you agree or disagree with the analysis & trade ideas that I provide and if/how to incorporate it into your own analysis. I do my best to highlight key potential developments, support & resistance levels, etc.. so you might decide to short into a resistance level that I’m looking to go long on a breakout, assuming you agree that is a key level where the buyers & sellers are likely to act on.

This video highlighted over a half-dozen trade ideas, including updates on at least a half dozen recent & as well as new trade ideas. Do you not want me to make a case (share my rationalization) as to why those trade ideas seemed like objective long or short trades, rather just say “I think you should buy this & sell that”???