Whilst the main US market built gains across much of the day, Nat' gas prices saw a huge swing. From pre-market gains of +7%, the Nat' Gas 3x lev' ETN of UGAZ turned red and dive bombed into the afternoon, settling -17.8% @ $29.44. Is the winters peak in for Nat' gas prices?
*first, an update on Nat' Gas, weekly
I should note, I had expected at least further upside for Nat' Gas, with best case upside of $7.50/8.00 by late March. The pre-market gains were indeed affirming that outlook, but the daily close has turned out to be VERY bearish.
We have a clear bearish engulfing candle on UGAZ. Opening gains..but with a huge net daily decline. This certainly does not bode well for the Gas bulls tomorrow.
One potential sign of a multi-month top in gas prices is the increasing volatility. Are we forming a choppy top, as we approach the Spring?
For those on the long side, trading stops..as ever..are imperative in these wild instruments.