Trade Idea: DGAZ / UNG follow up

I suspected UNG would pullback after its initial breakout and DGAZ looked like a good way to play that pullback, yesterday I though we'd see a little pullback in DGAZ though like the rest of the market.

I will likely increase my DGAZ position in the trading portfolio to a full size position rather than the half size it was or thereabouts. I'll likely also go through the Core portfolios and close UNG longs and replace them with DGAZ long (which is a 3x short natural gas ETN, not ETF).

I said I thought the DGAZ/UNG trade was separate from the broader market cycle and I do think that. I think UNG's pullback is a larger or longer duration move so DGAZ long would be a longer duration move.

 I think over-diversification/Modern Portfolio theory is retail trying to imitate the diversification that Mutual Funds MUST follow by law- (no position representing more than 5% of the fund), so they've sold everyone the myth of "diversification" and called it "Modern Portfolio Theory", I think you can diversify with 5-6 positions. The point is, Mutual Funds took what really is in my view, a law they are forced to comply with that kills returns to make Mutual Funds "Safe" for the average citizen and they've spun it to make it seem like "diversification" is a good thing, I agree, but not over-diversification.

In any case, the point is I think DGAZ and/or UNG are good diversified positions (I prefer DGAZ for the moment until a pullback in UNG is complete) because they are not correlated to the market like most assets are in either a 1.0 way or an inverse way.

Here's the DGAZ charts.

 2 min intraday, you probably recall this yesterday, I suspected a pullback and we have a pullback. You could probably wait for a bit of rounding toward the upside, a "U" shape in DGAZ before deciding if you want to go long, or it could move back quickly as a head fake kind of move.

 Past intraday, 3 min positive

5 min positive

And all the way out to 15 min leading positive.

I love UNG, but I don't want to sit through that kind of draw-down when those funds could be making money here for the time.

For some of you, perhaps the rounding of DGAZ (the reversal process) might make the difference in deciding whether you want to take the position on. I'll try to keep it updated, but I will at least fill out the trading position in DGAZ long.