This is a continuation of my 2020 bull rally theory, finding the best way of capitalizing on the potential opportunity in front of us is the next step.
UGAZ did not perform well long term during the bull rallies of 2012 and 2016, substantial gains were seen initially but the decay and volatility prevent this product from having long term gains. After the initial natural gas high the following heating season decay really took its toll on this product, with new lows before the final monthly cycle high. 2016 is substantially worse due to the extended time from the high in 2016 till the monthly cycle high in 2018.
UGAZ does present a opportunity for swing trading as can be seen by the substantial moves over 4-6 week periods. The daily cycle can like be used to swing trade UGAZ.
Leveraged ETN's are not designed to be held long term so these result do not surprise me. There are many things working against UGAZ, futures decay, futures contago, borrowing fees, rebalancing fees, rebalancing volatility.
This product should not be used by novice investors!!!
UGAZ did not perform well long term during the bull rallies of 2012 and 2016, substantial gains were seen initially but the decay and volatility prevent this product from having long term gains. After the initial natural gas high the following heating season decay really took its toll on this product, with new lows before the final monthly cycle high. 2016 is substantially worse due to the extended time from the high in 2016 till the monthly cycle high in 2018.
UGAZ does present a opportunity for swing trading as can be seen by the substantial moves over 4-6 week periods. The daily cycle can like be used to swing trade UGAZ.
Leveraged ETN's are not designed to be held long term so these result do not surprise me. There are many things working against UGAZ, futures decay, futures contago, borrowing fees, rebalancing fees, rebalancing volatility.
This product should not be used by novice investors!!!
I discuss the potential 2020 bull rally, UGAZ DGAZ and UNG