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Two Ways: UNG Weighs Alternate Options


Strengthen your portfolio in good times and bad.


UNG Fighting Regulators

As US regulators attempt to crackdown on speculation in commodities, the US natural gas fund (UNG) is considering a number of options to "get ahead of the process." Among them, according to The Wall Street Journal, is moving the fund to offshore energy exchanges or more into over-the-counter swaps markets to avoid potential new rules by the Commodity Futures Trading Commission (CFTC).

UNG's chief investment officer John Hyland said he's spent months fighting off criticism that the growth of his fund is increasing risk to the market. UNG assets grew from $727 mln in March to $4.5 bln in July. Its holdings now account for approximately 30% of all natural gas futures contracts outstanding.

From the Bull Pen: Bulls can look to oil stocks as a number of them have interesting setups on the daily charts. Schlumberger (SLB) breaking the downtrend should be on the radar. One can set a sell stop below $52-53 in the short term on upside tries.

From the Bear Cave: A look at the long term chart for UNG shows the state of the nat gas market. Bears can consider a downside play in Southwestern Energy Company (SWN). Breaking below $38 and the stock could have room to $34. There's resistance near $41 so a buy stop can be set near that level.

Quick Check Around the World

Asian trading closed with the Hang Seng 0.15%, India -0.69%, Shanghai -2.98%, Nikkei 0.76%, and Taiwan 0.49%.

Across the pond, we see the FTSE 0.28%, CAC 0.43%, DAX 0.18%

As of 7:50 AM EST, S&P Futures are trading +0.25 to 1013.75 and Nasdaq futures are -0.50 to 1631.25.

A Look at Commodities

Over in commodities, crude oil is trading +0.62 to 71.14 while gold is +2.300 at 958.80 this morning. Silver is +0.030 to 14.99 and copper -1.400 to 290.00.

The dollar index is -0.2250 to 78.3550.

On the Radar


08:30 Core CPI 0.2% (Cons)
08:30 CPI 0.0% (cons.)
09:15 Capacity Utilization 68.1% (cons)
09:15 Industrial Production 0.1% (cons)
10:00 Michigan Sentiment 68.5 (cons)

Another week in the books. Join me for a beer if you're at the Bridgeport Bluefish game in Connecticut this Saturday! Good luck and have a great weekend!

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No positions in stocks mentioned.

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