Thursday, March 31, 2011

UNG rockets higher now, +5.5% swing intra-day

Following our post from a couple of hours ago, the question now should be... why did UNG rocket higher?

That is a 5.5% swing in a few hours, intra-day. Amazing. Erratic, silly, hilarious. Imagine all the stop that got taken out and the millions lost and made today.

Why natural gas and UNG are crashing today

UNG today:

 Not even Obama could saved it today.

Please take  a look at the storage data for the week:

There was an injection of 12Bcf. The problem with this is that it happen weeks ahead of the usual (note the upward slope in comparison with e 5-year average curves, the shaded areas).

Summer season must be here, not good for natural gas.

This seems to have been a lot of pump and dump these last few days.

Given this week's cold weather, another surprise may be in store though.

Wednesday, March 30, 2011

Contango for UNG rollercoaster at 1.6%; Natural gas rises as Obama says we should use it, cold weather

Natural gas prices are climbing nearly 2%  today after President Barack Obama's statements that  said he wanted the U.S. to use more of it instead of foreign oil.

Colder weather is also being blamed to rising prices, as a cold snap is being forecast for much of North America in coming weeks.

The president emphasized that the U.S. could rely more on its own natural gas and biofuels to power vehicles and produce electricity.
AccuWeather forecasters said that cold weather could linger in northern parts of the U.S. into May or June. Environment Canada has also stated it expects a colder than usual spring. We still have snow on the ground in Ottawa and it is not melting too fast.


Contango, always very bad for UNG,  has risen slightly to 1.61%:

UNG continues its daily roller coaster, today up 1.94%:

Gold and Silver ETFs shine: which one to use? A silver ETF is up 600%

We track all gold and silver ETFs live here. In recent weeks silver has outshone gold, with some amazing performance. ETFs have performed quite well:

The top performer, AQQ, an ultra silver ETF, is up +600% since 2009, followed by USV, a silver ETN, at 233%.

Whether silver will continue to outperform gold is debatable. This INO video shows technical analysis of both silver and gold

Watch video, click on arrow to play:

Monday, March 28, 2011

Natural gas and UNG get clobbered today, contango 1.5%

The unusual rise late Friday is now followed by an equally astonishing drop in the middle of the afternoon Monday:

That was quite a nasty drop.

Contango is still in effect, so UNG continue to suffers. Current contango May-June is at 1.52%:

Japan disaster and Uranium ETF: huge roller coaster, profit either way

Please consider the chart for the uranium ETF, URA:

It has been through a real roller copaster since the disaster in Japan.

Given that URA is trading very close to $15, it is in a very good spot for straddles. Here are straddles for both March and April:

A 9% move until expiry in April will make the position profitable, either way. For May, that's 15%.

This is not advice. Options are very dangerous and may cause 100% loss. Please do your own due diligence!

Friday, March 25, 2011

Very unusual and big move on natural gas and UNG late Friday, contango at 1.5%

Natural gas and UNG are moving signficantly this afternoon, a very unusual move for late Fridays.  Please take a look at UNG:

For the day, UNG is up 4.15% right now (3:20PM).

Contango for UNG is now a little lower at 1.55% (May to June contracts):

China to impose rare earth tax, rare earths prices jump 9X, ETF to use

Hybrid cars and iPad future owners should take notice, the Chinese Ministry of Finance and the State Administration of Taxation have announced that China will impose a tax on rare earth minerals starting April 1. The rate will be US$9.1 per tonne for light earths, and $4.55 for medium and heavy rare earths.

China Daily reports that Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co, the country's leading rare earth producer estimate the tax would increase the company's production costs by about 720 million yuan this year.

China's export of rare earth metals habe broken $100,000-a-ton, or 9 times what it was a year earlier. In July last year, when each ton cost only $14,405 on average.

"The explosion in export values has coincided with a collapse in volumes coming out of China - the source of almost all the world's rare earth supplies - which has cut export quotas of the 17 rare earth metals and raised tariffs on exports.

China's actions have infuriated its trading partners but lifted the shares of the few mining and prospecting companies outside the country. Those include the US miner Molycorp Inc, Canada's Rare Element Resources Ltd and Neo Material Technologies Inc, and Australia's Arafura Resources Ltd and Lynas Corp."

The ETF for rare eaths is REMX, which we reported on this post February 28.

Here is the updated chart, that's quite a rebound post Japanese earthquake:

Wednesday, March 23, 2011

After MOO and COW, a new agriculture ETF is launched: CROP

Joining the likes of COW and MOO, a new ETF was launched today: CROP (no kidding).

There are ETFs for about almost anything these days. This ETF is being offered by a company called IndexIQ.

The IQ Global Agribusiness Small Cap Index is float-adjusted market cap-weighted and includes global small cap companies engaged in the agribusiness sector, including crop production and farming, livestock operations, agricultural machinery, agricultural supplies and logistics, agricultural chemicals, and biofuels.

The expense ratio is 0.75%.

These are the sector allocations:

Tuesday, March 22, 2011

Natural gas: UNG finishes rollover... to find yet more contango

As UNG has just finished rolling over its contracts, we now look at the contango situation for May contracts:

Between May and June contracts we do have contango, of 1.77%. This is number has been relatively steady. This is not good for UNG. Natural gas prices have benefited from the nuclear chaos in Japan as some investors seem to think that natural gas can be used in lieu of Uranium. This is likely a temporary situation.

Monday, March 21, 2011

Oil and gold jump today on Lybia events and volatility: ETFs to use

Oil has risen over $2 today, and gold another $12, hitting $1,431.

Will all the volatility and uncertainty in the world today, will gold finally hit $1,500 by the end of Q1 as gold bugs predict?

We track all oil ETFs live here, and gold ETFs live here.

CNN reports: "Oil prices surged more than $2 a barrel in electronic trading Monday after coalition forces launched an attack on Libyan military targets over the weekend.
The benchmark U.S. contract, West Texas Intermediate, gained $2.11 to $103.18 a barrel for April delivery. The more active May contract jumped $2.21 to $104.06 a barrel."

Friday, March 18, 2011

Riding the Yen rollercoaster on ETFs: FXY down 4%, massive, unheard of move

After the terrible earthquake last week, the Yen actually gained significantly, reaching new record highs. Last night, however, central banks around the wold coordinated a massive intervention that saw the currency go back to its original levels earlier in the week.

6 month chart:

5 day chart:

These charts are live 24 hours chart from INO (click here for 2 months free).

Investors can greatly benefit from these roller coaster moves by using the Japanese yen ETF, FXY. Please take a look at FXY in pre-market: -4.1%. This kind of move is unheard of.

We track all currency ETFs live here.

Thursday, March 17, 2011

The terrible nuclear ETFs, over any time frame

Another day, another crazy day for nuclear stocks and ETFs. Thisnis how they did yesterday:

We track them live here.

The 4 uranium-related ETFs and indices are at the bottom: NLR, PKN, NUCL, and URA.

These are their performances.

One month, worst is URA at -37%:

Six months, worst is still URA at -21%:

Over the long term,  they do not look much better either. This time NLR is the worst at -41%:


Wednesday, March 16, 2011

Japan Nuclear Fallout Good for Natural Gas And UNG , But Contango Is Still Bad

UNG has recovered somewhat in recent days following the nuclear issues in Japan. Investors seem to think that natural gas will benefit from the bad image nuclear energy is getting now.

However, we we always monitor it, the contango situation is still bad, in fact it is slightly worse today. We are also right in the middle of rollover period for UNG (March 15 to March 18th, please see dates here), which is where UNG actually loses the most - every month that there is contango.

Current contango between April and May contracts is 1.79% (as of 9:20AM) ($4.084 to $4.012):

So, as usual, investor beware. Currently, 5 minutes into the session, UNG is up 0.3%

The situation is extremely volatile in Japan. Investors who believe in natural gas, there are much better ways to invest in it (see this post).

Tuesday, March 15, 2011

Japan markets crashing: ETFs; Europe down sharp

We track all global ETFs live here. EWJ is the main Japanese ETF. This was the chart of global ETFs yesterday:

SCJ, to the right, is even worse.

This morning, the total drop over the last 2 days is now at 17%.

It's too early to tell whether this is an opportunity yet.

Europe is down 3.55% right now:

UNG ETF: amusing data from Google

Google finance is a wonderful tool to see many aspects of stocks. One of the features is the ability to track options. This morning, UNG options are quite interesting (or amusing). Every second or so, the prices alternate:

Prices for the March 5 calls are alternating between $0.23/$0.25 and $5.35/$5.50. Just watch, and they change by themselves.

This is likely related to the infamous reverse split by UNG a couple of weeks ago.

Monday, March 14, 2011

The nuclear fallout post Japan: nuclear and uranium ETFs crashing today: risk and opportunity

Uranium  and uranium, nuclear companies and utilities are crashing today due to the Japan situation. Risk or opportunity? Time will tell. Nuclear generations facilities on safe locations are still a good investment.

Cameco was off 17% earlier today. Denison off 23%! The URA ETF is currently off nearly 17% as well:

Nuclear energy is clean energy. Investors and institutions are pouring into nuclear and Uranium companies and ETFs in an attempt to profit from  the surge in alternative-energy initiatives.

We have created a new Tracking Live site for nuclear companies and ETFs. These are companies involved in the generation of nuclear energy in one way or another.

Track them live here! (click)

Yen, country, and currency ETFs: Bank of Japan injects record $198B today

The Yen is very volatile today as it is under cross currents. The earthquake has rattled the country and its markets, causing sharp stock losses, and will cause very speed production declines. Other countries have seen their currencies drop after such events. The Yen however, has been very volatile, in part due to the Bank's intervention, in part due to expected repatriation of capitals, some to pay for the damages.

Besides the record amount of cash poured into the financial system, the Bank of Japan also doubled the size of its asset-purchase plan.

"Policy makers said they were concerned corporate and household sentiment will worsen, with production set to decline in the aftermath of the temblor and an ensuing tsunami".

"Japan’s currency, which initially climbed against the dollar then retreated in the wake of the central bank’s cash injections, stayed lower after the policy decision. It traded at 81.95 as of 6:04 p.m. in Tokyo. Stocks stayed lower, with the Nikkei 225 Stock Average closing down 6.2 percent minutes following the announcement".

Plants Shut Down

Sony Corp., Japan’s biggest exporter of consumer electronics, halting operation at 10 factories and two research centers.

Toyota, the world’s largest automaker, closed all 12 factories in Japan through March 16.

We track currency ETFs live here and country ETFs here.

Friday, March 11, 2011

Japan: profitting from the Yen rising or dropping after the earthquake; can't have it both ways

The main Japanese Yen 's ETF is FXY. It has been through a  bit of a roller coaster, this before the devastating and unfortunate earthquake:

Although there are many ETFs that track the Yen and other currencies. We track them live here.

Unlike New Zealand's recent earthquake, the markets reaction to the quake in Japan did not cause the Yen to fall. There are many opinions out there. Some analysts opine that Japan will need to repatriate yens in order to reconstruct, and that's why the Yen actually rose today.

However, the Yen was actually at too high levels, according to the Bank Of Japan recently. A high Yen will definitely hurt Japan's exporters, at a time when they need as much help as they can get.

The Yen will also be key to gold prices. High yens, low U.S. Dollar, high gold, it is all intertwined.

This is why we like straddles so much. With straddles an investor can benefit whether the underlying stock goes up or down, as long as it moves a minimum amount. We compute these with the online StraddlesCalc tool.

Here are current straddles for March and April (prices as of 3:30PM)

March is of course extremely dangerous as there is onoy 1 week to go for those options to expire. However, the moves required are very low. Today's move (+1.33%) is higher than the move needed for a week.

What will it be? Rise or drop? It does not matter.

Options are very dangerous and may cause 100% loss. Please do your own due diligence. This is not advice!

Thursday, March 10, 2011

Natural gas storage: more bad news for UNG, futures prices drop today

We were looking at contango just yesterday. As new storage inventories were just released a few minutes ago, prices for the front months contracts have dropped further since then:

As of 10:30AM, front months contango is 1.45%.

Storage data showed a drawdown of only 71Bcf:

Although better than last year, there was  a sharp correction on the curve. UNG responded as expected:

Also, although contract pries are higher that last Friday, UNG would be at pre reverse split levels at  a price of $5.09 today, lower than Friday!

New UNG rollover dates: The UNG destroyers

Here are the new dreaded rollover dates for UNG in 2011:

The rollover of contracts from month to month is done over 4 days now as UNG became so big that it was feared it would affect the price of the natural gas commodity itself when it was selling and buying futures contracts. The total number of contacts it rolls over is exactly the same of course.

Current contango is 1.45$ ($3.982 for May contracts to $ 3.925 for April contracts). In other words, if the rollover were all to be done today, UNG would lose 1.45% of its contracts. just by sitting there.

One wonders how much money investors have lost since inception.

This, in addition to UNG having received the 'Kiss of Death' yesterday.

Wednesday, March 9, 2011

UNG Reverse Splits: The Kiss of Death

UNG has done it: reverse split. If you woke up this morning had saw the stock magically at twice what it was yesterday, sorry for the news.
"On February 16, 2011 United States Natural Gas Fund, LP (the “Registrant”) issued a filing announcing a two-for-one reverse split of the units of the Registrant. The reverse unit split will take place at the close of trading on March 8, 2011 and will be effective on March 9, 2011"

UNG did not double in price overnight.

Reverse splits are used for very, very poorly performing stocks, which is certainly the case here. This is very bad news, in my view.

As we have been posting here, contango is back in full force. Contango is the UNG killer too.

Monday, March 7, 2011

Middle east troubles: thinking on oil ETFs? Gasoline ETF performed much better

The recent serious troubles in the middle east have contributed to a very sharp rise of the price of oil, which now trades well over $100 per barrel. Oil ETFs have also performed well. We track all oil ETFs live here.

This is the performance as of 3PM today:

Note the top performance ETF, however, since 2009 is not an oil ETF. It's the gasoline ETF, UGA: +151%, beating al oil ETFs, including leveraged ETFs.

The nest best performance is OIH, the oil services sector ETF, but almost 50% lower.

If investors are feeling the price at the pump, that is one way to counter those effects.

Friday, March 4, 2011

Very bad news for UNG: natural gas contango widens today

This is very bad news for UNG lovers. The natural gas contango, (a.k.a, 'UNG killer'), has widened again today:

The difference in price between May and April contracts is now 2.01%. UNG needs to roll its contracts every month, losing a number of contracts equivalent ot the loss above.

U.S. Dollar is dropping hard again; ETFs for currencies rock higher

This is the USDX index for the last 7 years:

In recent months the U.S. dollar has been dropping hard again, touching  a cycle low of 76.50 earlier today.

 This is clearly vsiible above, or in the 6 month chart below:

There are many currency ETFs to use to go short or long the USD or the foreign currencies. We track them all live here. Currency ETFs have done extremely well indeed, it is a sea of green, except for the other poor currency, the Euro:

Thursday, March 3, 2011

World food prices set new record high: ETFs to use

Please take a look at the spectacular gains in commodity ETFs:

The U.N. says that world food prices rose to a new record in February and grain costs may continue to rise in the next several months. Only rice is keeping the world from a repeat of the crisis three years ago.

The UN’s Food and Agriculture Organization said today that an index of 55 food commodities   rose 2.2% to 236 points from 230.7 in January. This is the 8th consecutive gain.

Wheat rose as much as 58 percent on the Chicago Board of Trade in the past 12 months, corn gained 87 percent and rice added 6.5 percent.

Bloomberg: "Rising food costs contributed to riots across North Africa and the Middle East in the last several months that toppled leaders in Egypt and Tunisia. Prices surged as bad weather ruined crops from Canada to Australia and Russia banned grain exports after its worst drought in a half century".

The FAO forecasts that food production will have to climb by 70 percent between 2010 and 2050 as the world population expands to 9 billion and rising incomes boost meat and dairy consumption.

The UN’s food-price index rose from 176 points from a year earlier, with all five food groups advancing. The dairy index climbed to 230 points in February from 221.3 in January.
Milk futures traded in Chicago jumped 15 percent last month following a 26 percent surge in January, the biggest monthly gain since March 2004. Whole-milk powder prices rose to a record in its biweekly auction, Fonterra Cooperative Group Ltd., the world’s biggest dairy exporter, said March 1.

The FAO’s sugar-price index slipped to 418 points from a record 420.2 points in the previous month. The UN agency’s index is trade-weighted, with the sweetener accounting for 7 percent. Raw-sugar prices climbed 37 percent in New York in the past year.
The gauge for meat, which makes up 35 percent of the overall index, rose to 169 points from 165.9 points. Meat is a “significant” part of the diet in developed countries, which may see more inflation from food than in 2007-08, according to Ken Ash trade and agriculture director at the OECD.

A gauge of cooking oils and fats gained to 279 points from 277.7, the FAO said. Its cereal-price index climbed to 254 points from 244.8 in January, below the peak level of 274.3 in April 2008, the report showed".

There are many ETFs that track goods and grains: We track the ETFs live here

Wednesday, March 2, 2011

New spread ETFs: double bull and bear positions on leveraged ETFs!

The universe of ETFs keeps getting bigger with the launch of exotic instruments on an almost daily basis. I am still waiting for the "unemployment ETF", anyone?

Factor Shares has just launched "spread exchange traded funds". They allow investors to simultaneously hold both a bull and a bear position in one leveraged ETF(!). (As if leveraged ETFs were not bad enough, but maybe holding two of them is not as bad?). 

Designed to "simplify spread trading and lower its cost barriers", the new ETFs enable investors to track two market segments, one long and one short, in a single ETF position. The initial five FactorShares ETFs pair up major asset classes from among the S&P 500 Index, US Treasury Bonds, Gold, Oil and the US Dollar.

As a plus, anyone who wants to engage in such transactions would not have to pay double the fees.

"The initial suite of FactorShares spread ETFs are designed to rebalance daily to achieve the desired effect of maintaining dollar neutrality. FactorShares ETFs are also capital efficient, targeting a daily leverage ratio of 4:1, where each dollar invested provides approximately two dollars of long futures exposure and two dollars of short futures exposure, immediately after daily rebalancing.  FactorShares ETFs seek investment results for a single day only, not for longer periods."

Tuesday, March 1, 2011

Gold and GLD ETF: New all time highs

As per our post this morning. here it is, a new all-time high for gold. The market did not like at all the inflation news.

And so did GLD. The triangles shown are from INO's tool, very accurate in this case, green to buy, red to sell, click here to get 2 months bonus free).

Gold set to rocket higher and break new record high today: gold and silver ETFs

Looks like gold is setting up for a run at the all-time high of USD $1432. It is currently trading at 1422. The instabilities in the middle east, now with Iran being added to the lot, is certainly helping lift prices.

More impressive than gold itself are the gold and precious miner ETFs, which we track live here.

Please see the performance charts:

AGQ is mightily impressive with a return of 491% since 2009, followed by two other silver ETFs, DBS and USV.

We eagerly await what the day, and the month, will bring.