UNG

Remember that tomorrow is the EIA Natural Gas report, while it's not usually much more than a creator of intraday volatility, it wasn't that long ago (June) that we saw a 15% move in UNG in a day on the report. UNG is also one of the few core short positions as an equity long.

UNG is up nearly 3% today, it's been up higher this morning, but is seeing some resistance from the 9/12 area.

I personally don't pay much attention to UNG, I have faith in the position and am content to let it take its time and do what I feel confident it will eventually do, that is head toward at least $30-$40 and likely it will exceed that by quite a bit a there has been a major change in UNG, someone is suddenly very interested (as in this year). Still what UNG needs is to move from a stage 1 base to stage 2 mark up and the only way to really do that is to have a nice move up on heavy volume, retail traders see this as smart money buying and will chase it sending UNG in to stage 2 mark up, in reality smart money was in place long ago.

 The life-cycle of assets, UNG from stage 4 decline to stage 1 base as the life-cycle starts over. Stage 2 mark up would be next and where UNG would trend higher.

 We expected a pullback at this white arrow and some accumulation in to the pullback. The long upper wick on today's daily candle shows higher prices being rejected as UNG makes it's first contact with resistance from early September. UNG needs to be above the base area before stage 2 volume/price spike is likely.

 The 60 min chart showing the downtrend that 3C is confirming and the transition to a leading positive divergence at the base area.

 On the 15 min chart 3C is stronger here than it was at the last base highs in July, so that's a positive development.

 Since the early September pullback where 3C went leading negative and then positive and now is in line or confirming the move up.

 On a 5 min chart the profit taking and disappointment with early resistance today has formed a bit of a leading negative divergence on the 5 min, but that may change.

Divergences start on the shortest timeframes and the 1 min is now turning more positive than it was earlier, if this keeps up the positive posture will migrate through the 2, 3 and eventually 5 min chart.

However for now these are just small moves, the real move of interest is the volume/price spike signaling the start of stage 2.