Surprise, surprise ... EIA Nat Gas report ... 12/17/2009 10:30 AM followed by 10:35 AM commentary:

" January natural gas, on the other hand has been in positive territory all session. After trading almost sideways all session the energy component began to gain momentum early this morning, rising over 2% higher to session highs of $5.611 per MMBtu. Ahead of this week's inventory data, where consensus is calling for a draw of 178 bcf, natural gas is 2.5% higher at $5.597 per MMBtu. Following the data, which showed a draw of 207 bcf, natural gas spiked to fresh highs of $5.911 per MMBtu and is 7.5% higher at $5.869 per MMBtu. "

My start prices for UNG $10.03 - $10.07 ... @$10.07 UNG is now : $10.66 + 5.86% ... 1 day (smiling)

----- and ---- every Thursday ... another nat gas report. There should be numerous oportunities to "trade" UNG, CHK, SD, XTO, etc ... based on the flunctuation in nat gas prices, the US dollar (strengthening, or weakening), in the days prior to EACH report. Winter is NOT predictable ... there'll be thaws ... followed by the "deep freeze" Soooooo, this is where I divide some of my money to buy and hold thru -- March-April-May --- and the rest is "Swing trading".

Here are 2 must read ... know, bookmark, and monitor websites:

US EIA Weekly Natural Gas Storage Report Schedule

The standard release time and day of the week will be at 10:30 a.m. (Eastern time) on Thursdays

******* http://www.eia.doe.gov/oil_gas/natural_gas/info_glance/natural_gas.html

US EIA Short-Term Energy Outlook

******* http://www.eia.doe.gov/emeu/steo/pub/contents.html

Southern New England is experiencing a cold snap ... 14F with wind chill -1F and a Low forming in the Gulf of Mexico that could be a huge "snow" storm for the Saturday/Sunday period in Southern New England. 50% of USA homes use nat gas ... expect the Thursday US EIA to report another drawdown in nat gas supplies based on it takes MORE btus to bring a home from -1F to 70F ... and the other 50% primarily use home heating oil so expect the Wednesday US EIA to report a bigger drawdown in crude supplies. That's another reason I invest in the CHK's, UNG's, etc ... the money goes circular. When I invest in the companies, of the products I use, the money comes back to me, in dividends ... and stock price increases.

United States Natural Gas Fund LP (NYSE Arca: UNG) 03/25/2010 12:30PM ET
$7.16 -$0.22 -2.98% Vol 21,591,230

Chart Checkup (15 min / 10 day - short term outlook)

Moving Average Price Compare -- No current signals

Moving Averages -- No current signals

Bollinger Bands
UNG's recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, UNG is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

Stochastics
The Stochastic Oscillator is registering a bullish signal as the %K line is above the %D. However, UNG is neither overbought nor oversold.

On Balance Volume
The On Balance Volume indicator (OBV) presently offers a bearish signal. This is because the slope of the indicator is negative and shows that there is a lack of buying interest.

Price Channel
UNG is trading within its price channel. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the price action over the last 5 minute period.

.... there is a great deal of accessable , downloadable info on UNG's website:

per: http://unitedstatesnaturalgasfund.com/

"The investment objective of UNG is for the changes in percentage terms of the units?? net asset value to reflect the changes in percentage terms of the price of natural gas delivered at the Henry Hub, Louisiana, as measured by the changes in the price of the futures contract on natural gas traded on the New York Mercantile Exchange that is the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next month contract to expire, less UNG's expenses. "

get the prospectus ( downloadable PDF - 132 pages ):
http://unitedstatesnaturalgasfund.com/PDFS/UNG-Prospectus.pdf

As to basic info, 50 percent plus USA homes use nat gas for heating and cooking, hot water, etc. The current decline in nat gas is the expected "seasonal" drop in demand accompanied by warmer weather, hence LESS need for nat gas for home heating.

However, due to the drop in nat gas prices, some coal fired plants switched over to "cheaper" nat gas ... so the market doesn't yet have comparable "numbers" for this part of the demand equation, comparing week to week, this year to last year ... and so, I expect the market may be "surprised" from time to time, like when air conditioning season kicks in and power plants have to turn on the afterburners to cover that demand.

UNG Fees and expenses
Expense Ratio 0.60%
Gross Expense Ratio 0.97%
Net Expense Ratio 0.97%
Management Fee 0.60%

UNG Volatility measures
1-year standard deviation 48.82
Mean 15.50

UNG Top holdings
Company name % Net assets
Fidelity Instl MM Fds Government I ....... 18.04%
Goldman Sachs FS Government Sel .... 17.14%
Morgan Stanley Inst Liquidity Gov Inst ... 8.79%
Percentage of holdings ............................. 43.97%

Basically, you have to look at UNG as a " TWO-part'er".... something for the Bulls and the Bears .... and that's supply and demand.

Depending on the "Season", Increasing supplies are bearish ... while decreasing supplies are bullish for nat gas and therefore for UNG. Depending on the "Season", Increasing demand is also bullish ... while falling demand is bearish.

I. Demand Part A and B

Part A is "bullish" in demand (heating) focused winter months when futures contracts are rolling over from current month into a pricier foward month.... which will STILL increase in price and value due to demand. More than 50% of USA homes use nat gas heating, in addition to the power plants using nat gas to generate electricity for the electric heat homes.

(1) Here, you can get BAD weathe, or REAL BAD weather, r related spikes and increses ... thank you ol' man winter ...

(2) Also, here, Bulls owe a thank you to the US EIA. Investors (usually) get a weekly boost every Thursday (10:30 AM) when the gas supply report comes out.

Part B is "bearish" upon the end of the heating season ... as any near month contract you're thinking of buying ... IS going to decline in price as demand slacks off 'till power plants start buying to fuel summer power demands (air conditioning, etc) the US EIA report will " usually" be reporting "Bear friendly" nat gas supply "increases."

II. Supply

The US EIA counts gas in storage, and in the pipelines as "Supply". The equation is basically reduced to: Did the net storage figure, as reported by the US EIA, go up, or down?

Part A - Supply goes UP ... and here, the US EIA report will " usually" be reporting "Bear friendly" nat gas supply "increases."

Part B - Supply goes DOWN ... and here, the US EIA report will " usually" be reporting "Bull friendly" nat gas supply "decreases."


Soooooo, you have a 'long' and 'short' window of opportunity with UNG. But, you have to understand "Seasonality" .... or read my posts on Seasonality ....

You should close these old plays that are BIG losers off. Even ifn UNG was to run to 8.30...which is mo or less the highest it should run without putting in final bottom ...it ainna gonna do you no GOOG since picks that are on the bored past 12 mumphs are werthless. *-) Oiyay...you "had better" close GLW out too whilst you still have a gain *-) 3J

The temperatures have not aided the drawdown of natural gas supplies and prices keep dropping .. undermining UNG. Closing UNG at this time until conditions turn favorable.