UNG's Collapse: the Kiss of Death strikes again

The collapse of UNG post reverse split (a.k.a. the Kiss of death) continues. UNG now trades with a 16 handle.

Storage numbers released yesterday showed a stunning increased. The red curve is the current year's curve, compared with the average 5 year range in shaded gray

Remember the kiss of death post on UNG?

UNG Kiss of Death - Again! Reverse Splits. Don't Walk, Run.

Ooops, they did it again. it wasn't even that long ago that they had done a reverse split (less than 1 year)

They are called kiss of death for a reason. What happened since the last reverse split?

Did they stock go up +301% Oh no, not at all.

March 11 2011: stock was at the equivalent of today's $42 or so. Last reverse split was from $5 to $10. Obviously that was not enough, so this time it was from $5 or so to $20. Given the current supply glut on natural gas, end result could well be the same.

Current natural gas very high contango: Should UNG really rebound?

The popular, yet perennial money-loser UNG dropped to under $5, then recovered a little:

Please consider the current contango situation, through the front month contract prices

Contango is at 4.5% on the two front months, and almost 8% from first to third month.  This is a really bad (high) number. Whenever this happens, UNG suffers.

Buyer beware.

UNG: Don't Walk, Run!

What else can be said about this dreadful ETF.

Why UNG is Crashing

UNG is taking another tumble today. This story repeats itself over and over: contango and storage.

 Ouch.

Thursdays is in general due to storage. Here are today's figures:

That red line sticking above the 5 year channel is just dreadful. There is too much of the stuff.

Contango today is there too, but it's not so bad.:

Maybe now that the weather is colder things may change. Hope is the last to day for the dreadful UNG.

Natural Gas' Huge Contango: Kiss of Death for UNG; UNG Drop to $7.x

This is the current situation with natural gas prices:

There is currently a contango of 4.1% between the the two front month contracts. This is quite large. When this happens, UNg tends to underperformed. There has been contango for quite some time now, and anyone who bought UNG is painfully aware of the consequences.

In the meantime, UNG has now a 7 handle:

Absolutely dreadful.

Nat Gas and UNG Falls off a cliff, attacked by all sides: Huge contango, hurricanes, storage

UNG is falling off a cliff today, as pretty much expected here. It is suffering from an attack from all sides.

Meanwhile, there are no expected hurricanes in the near future:

Storage numbers were released today, showing a large injection of 11Bcf.

Contango today is nasty, at a whopping 7% for the two front months (December and November)

Bad news all around for UNG.

Bad for UNG: huge natural gas contango to december

This is the current situation with natural gas contango:

It is currently 0.65% for November and October, and a whopping 7.2% from December to October. This implies prospects of prices rising, however, the contango is very bad (high) for UNG for December. Not good.

Contango and The Dire Effects on UNG Once Again Proven

On Setember 14 we posted about the state of contango an its dire effects on UNG. This is precisely what happened.

Buyer beware.

Contango Strikes Back In Full Force; Natural Gas and UNG Poised to Explode

Which way is the question, but that is matter?

The price of natural gas has held relatively steady in recent weeks.While this is good news for investors in the commodity, contango is now back in full force.

Contango means very bad enws for UNG as it has to pay more every month to roll over its
contracts: same money, fewer contracts. This is buyer beware.

This is however, hurricane month and season, all the makings for a very interesting - and volatile -  combination. Just near perfect.

Below are straddles for UNG for both September and October 2011. These allow an investor to profit either way, up or down.

September only has 2 more days to go and is an obvious extreme risk. October requires an 8% move or so for the position to become profitable.

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