Reasons not to take a UGAZ position

UGAZ as an Instrument

Low liquidity highly levered ETNs are not an ideal trading product. They can be dissolved split or manipulated based on their derivative behavior.

These products suffer from leveraged decay.

Can't manage risk overnight (no stops) so one euro market correction may fuck you.

NG Technically

  • Price migration lower.
  • Fresh break from an area of established balance
  • Sure we are at an extreme but they call this market the widow maker for a reason.
  • Do you really want to place a bet on a falling knife or bet that the market will suddenly stop right here and reverse? Why pick tops and bottoms?

TL;DR

This market is in a steady downtrend and there is no reason to try and pick a bottom or fight the trend. Sure may be good for a partial move up as we correct inventory above but may not be more than that.