Abe Mishima

Thursday Outlook: Commodities, Global Markets

UNG hit an intraday 52-week low for the second time this year. It looks like a 3rd 52-week low will be made in the next week, and if a 4th one is made, then this ETF is history. In spite of this, the volume is there and traders are still buying. Don Dion is signaling DUMP, DUMP, DUMP, as though Mr. Smarty Pants is doing us a favor. I won't be dumb enough to go out on a limb and predict how this is going to resolve itself. A NAV that is 10-12% below share price is not going to curry favor, but what's the big deal? At the gambling table, you pay a premium to play the game. UNG's long term fate could be as follows. CFTC tells all commodity etf's to limit the number of contracts they can hold. The LP redeems some shares at NAV and the longs take a short term hit. UNG rewrites its charter to trade in short and long term ng positions. That one move could remove the overhead and volatility of month-to-month rollovers. Bingo, that's the reason to stay in the fund. Wishful thinking? Yes. But most investing is based on a certain degree of faith.

Wednesday Outlook: Commodities, Global Markets

David, I look forward to your comments after an ugly extended trading session on July 2, where the traders kept taking down many stocks, including big oil, gas, and commodities. The fear of being long has seized investors again. IYR, an ETF I have been watching, got slapped on the face today. I just can't get myself to push the buy button on this one. As for EFA, if you just close your eyes and buy it, it will produce double digit gains by 2010. But that is just my intuition. Every good card player has to have a sense of intuition and timing. And be blessed with (lady) luck. POT was a rollercoaster on Thursdays. Where it stops, nobody knows.

Friday Outlook: Commodities, Global Markets

David, I can see why you are the #1 most followed writer on seekingalpha. Your analysis of each chart is succinct and to the point. As I try to understand what happened to the markets in the past year, I find Fareed Zakaria's article in the most recent issue of Newsweek magazine the most enlightening. We let a bunch of cowboys and speculators nearly destroy our banking system and economy. We had something that worked (or sort of worked) for decades, thanks to the Glass-Steagall act. Now we have to regulate risk. But we should go further than requiring "skin in the game." Anyone in a position of power, whether in government or finance, who makes a life wrecking decision has to pay in lost earnings, higher taxes, or reduced benefits. Examples: Congress should suffer a reduction in pension for the Iraq fiasco. Angelo Mozillo should be fined heavily for actively promoting/marketing subprime mortgages. The trouble with society is that there is no accountability.

Anyway, not to sound overly moral, I have skin in the UNG game, not because I believe that NG prices will go up, but because I sense that the price of UNG is being actively manipulated by hedge funds, and I feel I can piggyback on their moves. Known as trading what I see. The smartest members on Yahoo message boards have been trying to figure out the NG market for weeks. There is nothing divine or esoteric about natural gas. It is a commoditiy and as such it is and always will be subject to manipulation. UNG just throws in rollovers, swaps, and exchange traded volatility into the equation. Everyone and his uncle is in on the action.