Yesterday's up-gap spike to new highs above 55.00 in the U.S. Natural Gas Fund ETF (UNG) followed by a close near the low of the session, which then was followed by a gap down opening this morning and a plunge to the 52.00 area not only satisfied a multi-month upside swing target off of the September-December 2007 base formation it also left behind an exhaustion Island Reversal at the very top of the advance. Usually, such an exhaustion signal identifies a significant price peak and a near-term reversal in trend direction. Such is the case in the UNG, which now points lower towards 50.00 next, on the way to 48.00 thereafter.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.