| | | The UGAZ rose overnight Thursday to peak just over the $2 Nat Gas contract equivalent... down ever since... but, that's the point of having the functional trading pairs... Rotate into DGAZ at the reversal... and its all up all the time... as long as the market stays dynamic enough to make it work.
If the pattern holds... UGAZ should be at the lows again in 2 or 3 days... and then reverse field again...
But, it might be breaking the trend in the pattern this coming week... ? I'll wait for it and see... also needing to see how independent the trade might prove to be from the larger market index issues...
My guess is the major market averages will be dominating the news next week... as people get used to the idea that the virus acceleration risks have now peaked with a successfully flattened curve... but the flat curve doesn't actually make the risks go away... but prolongs them. Those thinking there would be an end to the issue about now... will be coming to grips this week with what it means to the economy... that you can't just "turn it back on"... The Fed fueled market bubble... makes about as much sense in stocks now, as the inverse trade did... when paper silver was trading at $14 when real metal traded at $24... Having priced in a return to normalcy... the more realistic view... with a lack of a timely return to normalcy... seems likely to dominate now.
Would be a lot more convenient if watching these things move didn't require staying up 24 hours a day... but if you count on trading New York hours only... you missed the trade in the UGAZ rip and reversal...
Stock charts doesn't give you charting of the pre-market and after-market action... or overseas trading... so the chart for UGAZ looks like it moved sideways on Friday... That might not matter for things with only illiquid trading during the off hours... but, UGAZ was not illiquid in the trade between Thursday and Friday... so if you're not paying attention... you'd miss that the thing peaked over night in a dynamic trade that was worth participating in...
I'm going to have to address the charting issues, again... and try to parse the nature of the influence in the interactions between different venues as trading becomes essentially a 24 hour per day always on utility.
Other than the energy trades, I've been out of sorts in market thinking over the last week or two... just not feeling it in much of anything other than the oil trade...
Even the oil related shares I've been liking have been becoming sluggish... ENBL, WES, ENLC and SMLP have all made decent moves... but they're just not moving quite as much these days...
The trade on the bounce in the major markets... has been slowly running out of steam in the recent cycle. Glad to have found the functional trading pair in Nat Gas when oil ETFs went dysfunctional... but the rest of the stuff I've been following... has seemed lackluster, and over the last week it has all seemed a tad peaky...
Even true of the gold and silver shares that I pegged as screaming buys at the bottom... most of which have now recovered their pre-crash prices and added to them. MAG, already cash rich, stands out in that group as having just recently attracted $60 million from Eric Sprott... analysts now peg it with a $20 target... but I liked it much better at $4.
But, that's just noticing that those better mining issues seem to be returning to a semblance of market normalcy... even if not normal for gold and silver shares over the last decade... I'm still not trusting it, or the gold and silver to the moon touts, just yet.
So, gotta love the cheap shares for holding while waiting to see what happens next... but otherwise I'm all out of the paper metals trade for a while... as the risks of participating seem to be growing. The wheels came off in the oil trade... mostly at the expense of the producers... But the producers won't be the ones who suffer if the metals markets fail ? The risk of contract buyers taking delivery and forcing paper to convert into real metal... keeps growing... that meaning it is likely there are failures ahead. And then, they'll probably just cash you out... spit you out of the trade and call it good... when that happens.
Own the physical metal, own shares directly... or avoid the trade entirely... or at least realize that JNUG and NUGT or the like... aren't a guarantee you'll be along for the ride if the metals do go to the moon.
The junior miners and explorers haven''t really benefited much, yet, from the rip in gold shares...
Still a lot of sleepers out there... but watch what happens to the gold and silver shares as the market turns lower again...
I rolled into SRTY on Thursday... when the general sense of "not feeling it"... became more of a sense of urgency in being flat out uncomfortable. SRTY seems to outperform the SQQQ that I rode in February / March. Trading pair is with URTY... |
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