ETF’s Explosive Growth Creates Share Shortfall (UNG)
The Wall Street Journal’s Ian Salsbury explored a potential share shortfall in the U.S. Natural Gas Fund ETF that could happen in just days. According to the report, the fund managers anticipated a shortfall back in March and filed for more shares at that time. The requested shares were not granted until May, and were not issued until after the fund had run out of available shares for two days. Now the fund is again looking at a potential share shortfall and have requested more. With the large inflow into the fund they may once again find themselves coming up short. Ian Salsbury states that, “If the fund can’t issue enough shares to meet investor demand, its shares could begin trading at prices higher than the underlying value of their holdings, breaking a key promise ETFs make to investors and possibly influencing prices in the natural-gas futures markets.”
For the whole story click: HERE
Smart Scan Chart Analysis is showing some near term weakness. However, this market remains in the confines of a longer term uptrend Uptrend with tight money management stops.Based on a pre-defined weighted trend formula for chart analysis, UNG scored +70 on a scale from -100 (strong downtrend) to +100 (strong uptrend):
| +10 | Last Hour Close Above 5 Hour Moving Average | ||
| +15 | New 3 Day High on Tuesday | ||
| +20 | Last Price Above 20 Day Moving Average | ||
| +25 | New 3 Week High, Week Ending June 20th | ||
| -30 | New 3 Month Low in April | ||
| +70 | Total Score | ||
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