Tuesday, September 01, 2009

Another reason to be bullish on UNG: powerful wall street shorts are trying to cover at all time lows

When you see the headlines for UNG filled with wild eyed bearish sentiment you know some big wall street funds are trying to get out of their positions. So they pay some sham journalists to write up articles trashing their shorts to get individual investors to sell to them at the bottom. Not all of these headlines sound bearish, but all of the articles are. In summary:

This morning: "Short this ETF"
Yesterday morning: "UNG opens at 20% premium"
The past few weeks its been "contango will shred this ETF"

Come on folk, UNG is at an all time low, down 80% or so from the peak last year. Since it directly invests in natural gas futures, the futures have done just about the same thing. Is it really such a good idea to be shorting natural gas here at 7 year lows? Wall street scum wants you to think so. Gimme a break, this thing is a screaming buy here at the capitulation bottom.


Gridlock said...

Pyth- I would agree with you that the selling seems overdone here. However, I believe that the divergence in oil and natural gas will be rectified more by a drop in oil prices than an increase in natural gas. Still, the RSI, CCI and Stochastics are all at levels where a buy signal should show in the next day or two. Hang in there.

pythagoruz said...

lol, and another one just minutes before the market close. They weren't painting the tape or anything, nope:

"Natural Gas ETF Premium Reaches 20%: Time to Unload?"


What a criminal joke the financial media is. The whole market stinks of corruption, but hey, its a bull market!

pythagoruz said...

Hey gridlock, thanks for the positive words. I agree with you that there is clearly no bottom yet, but THE bottom is forming here. Its just a matter of days before the reversal shows on a daily time frame, then a few more to flip some buy signals.

The premium increased again today (UNG outperformed natural gas) which tells me that investors want to be long here but they don't want to mess with futures.

I expect the premium to peak at the bottom.