This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Don Dion's Weekly ETF Blog Wrap

Here is some of what Don Dion blogged about on RealMoney this past week.

Picking a Natural-Gas Play

Posted 12/11/2009 1:52 p.m. EST The future for natural-gas prices remains bearish in my view, but there's no denying the fuel's recent rally, or the short-term investment opportunities for those of a more bullish mindset.

If natural-gas prices stay strong, the newer U.S. 12 Month Natural Gas Fund (UNL) is a better bet than the U.S. Natural Gas Fund (UNG). But if you want to hedge your bets, the First Trust ISE-Revere Natural Gas Fund (FCG), which has tracked oil equipment and exploration ETFs more closely than the price of natural gas, would likely benefit if both oil and natural-gas prices increase.

In the past month, while the U.S. Oil Fund (USO) fell 11.6%, UNG gained 5.6%. The divergence was most dramatic today with crude prices briefly dipping below $70 per barrel, as natural-gas prices jumped 7%. UNG previously outperformed USO for brief periods this year, but the general trend has been one of consistent underperformance, as UNG fell to one new low another.

The recent rise in natural-gas prices is largely thanks to early winter weather in parts of the U.S., which caused inventory to dip for the first time in nine months. While some may see this as strong evidence of a resurgence for natural gas and UNG, the supply/demand imbalance continues to make me cautious. In any case, UNL has outperformed UNG throughout the rally and will likely continue to do so if the jump continues.

Where winter heating costs are concerned, oil prices may benefit as much as natural gas, a scenario that would make FCG the best play. I have often promoted FCG as an alternative to the damaged UNG, but rather than following the recent natural-gas rally, FCG appears to be mimicking the performance of oil and oil explorer funds, with UNG price movements nudging it up or down within that group. In this scenario, FCG will outperform the other instruments it has been trending with, including the iShares Dow Jones U.S. Oil Equipment Fund (IEZ), due to its stronger exposure to natural gas.

> >Bull or Bear? Vote in Our Poll
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAXJ $54.07 0.00%
FCG $24.14 0.00%
EWY $52.58 0.00%
EWZ $28.96 0.00%
UNG $6.61 0.00%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs