BOIL vs KOLD Natural Gas Leveraged ETFs : LONG KOLD
Updated
The KOLD / Boil Ratio is shown here on a daily char. A rising ratio level indicates KOLD is rising
and BOIL is falling making the ratio rather extreme If KOLD rises 10% in a week and so BOIL falls,
in a hypothetical say they start out 140 and 20 respectively and KOLD goes to 154 while KOLD falls to 18 the ratio moves from 7 to 154/18 = 8.55 the ratio moves 22% for the week.
What does this all mean ?
With triple leveraging and management fees taken out long leveraged ETF shares may experience time decay on a daily basis. Share values are net after expenses.
From the chart's visible the only time the ratio fell and BOIL was the long play was
September 25,'23 to November 15, '23 and December 14, '23 to January 14, '24.
In 2023 prior to late September KOLD was always the long play, In 2024, after January 15
and to the present KOLD is the long play and the ratio is accelerating and getting more
volatile as it is potentially getting over-extended. Combined volume in the range of 20 M /day
is 2X showing great interest by market participants.
I conclude especially since natural gas spot prices are falling as recession fears are not yet in the past, that KOLD is the leveraged gas futures ETF to take long. This trader considers the
management fees as a cost of business. The futures are stratified and leveraged obivously
the cost brings value.
I will take shares of KOLD and take a call or two along the way for an expiration in the fall
whenever price rises about an even $5.00 amount to be assured of the lowest price.
I will follow KOLD on a 60-90 minute chart looking for topping wicks or a price fall under
the EMA 7 as a sign that it should be on watch for a market top. Frankly, I do not expect to see it. This is because on the 2-time frame RSI indicator ( by Chris Moody) with the 4H in green
and the 1W in red, both lines are rising and in a healthy 75 +/- range. If they top out and fall, then I again think I might be seeing bullish divergence and put the trade on watch.
For those who trade VWAP bands and volume profile, the ratio has been in an obvious breakout since early November with a pullback in mid-December after the ratio rose outside the third upper VWAP band. Using the VWAP bands and the volume profile will make any fades very obvious most especially on lower time frames.
and BOIL is falling making the ratio rather extreme If KOLD rises 10% in a week and so BOIL falls,
in a hypothetical say they start out 140 and 20 respectively and KOLD goes to 154 while KOLD falls to 18 the ratio moves from 7 to 154/18 = 8.55 the ratio moves 22% for the week.
What does this all mean ?
With triple leveraging and management fees taken out long leveraged ETF shares may experience time decay on a daily basis. Share values are net after expenses.
From the chart's visible the only time the ratio fell and BOIL was the long play was
September 25,'23 to November 15, '23 and December 14, '23 to January 14, '24.
In 2023 prior to late September KOLD was always the long play, In 2024, after January 15
and to the present KOLD is the long play and the ratio is accelerating and getting more
volatile as it is potentially getting over-extended. Combined volume in the range of 20 M /day
is 2X showing great interest by market participants.
I conclude especially since natural gas spot prices are falling as recession fears are not yet in the past, that KOLD is the leveraged gas futures ETF to take long. This trader considers the
management fees as a cost of business. The futures are stratified and leveraged obivously
the cost brings value.
I will take shares of KOLD and take a call or two along the way for an expiration in the fall
whenever price rises about an even $5.00 amount to be assured of the lowest price.
I will follow KOLD on a 60-90 minute chart looking for topping wicks or a price fall under
the EMA 7 as a sign that it should be on watch for a market top. Frankly, I do not expect to see it. This is because on the 2-time frame RSI indicator ( by Chris Moody) with the 4H in green
and the 1W in red, both lines are rising and in a healthy 75 +/- range. If they top out and fall, then I again think I might be seeing bullish divergence and put the trade on watch.
For those who trade VWAP bands and volume profile, the ratio has been in an obvious breakout since early November with a pullback in mid-December after the ratio rose outside the third upper VWAP band. Using the VWAP bands and the volume profile will make any fades very obvious most especially on lower time frames.
Trade active
ZOOM-in chart 30 minutes swing long trades shown ( Note - the BB is set to EMA 7) for a tight over-under. not zigzag yet as no partials they will be early Friday afternoon market time especially because there is no trading on Monday.Trade active
Ratio is sideways today.Note
BOIL is the runner today, The ratio is doing a little correcting.Trade active
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