DGAZ = VelocityShares 3x Inv Natural Gas ETN
It's still not crystal clear for a few people the difference between DGAZ and UGAZ .
If you buy DGAZ it's the same when you short NatGas. It's outperforming NatGas as it's a 3x ETN .
A few of you were trying to catch the bottom in DGAZ during the last few weeks but you've noticed that it's an expensive game.
As NatGas entered into a market the only time when we buy DGAZ is the intermediate decline. Especially when NatGAs is entering into the panic selling stage. During the last few days Natty just started the ICL decline. We are days away from the panic selling but don't worry it will come....
I highlighted with red arrows in the past when Natty entered the panic selling and you can see that is the time when DGAZ started to skyrocket. It's always after a dead cat bounce when Natty is breaking down an important resistance. Sometimes at these Natty dead cat bounces - when it's stronger than expected - DGAZ opens with a down gap before this rally starts. (blue arrow)
I will try to predict when we enter into the panic selling stage in NatGAs (most probably middle or end next week) by that time you have to be positioned in DGAZ . If you already have the position it's ok just don't stop it out when we open down with a gap in DGAZ on Monday or Tuesday. Manage the position size with care.
I set it as Neutral as we are selling NatGas and buying DGAZ ....
and US natural gas december. The november had a nice decline but december was frustrating till yesterday. Today as november was running out december has big gains also. Maybe that's the reason for the DGAZ pop.
I tend to think we entered into the panic selling stage without any bounce.
I told you natty is lovely on the short side in the ICL.