Four ETFs Looking for a Q4 Bounce – UNG, TAN, TBT, FXE

As the third-quarter winds down, we decided to take a look at some ETFs that have had a rough go of it, year-to-date. Are any of these funds poised for a sustained rally or are they doomed to a further collapse in Q4? Here are four ETFs looking for a bounce.

Running on Fumes

A weak pricing environment for natural gas has taken its toll on the United States Natural Gas Fund (NYSE: UNG). UNG has fallen 36.4% so far in 2010. Lately, traders have been sifting through information with mixed implications.

The National Weather Service has noted the possibility of a tropical weather system that could pose a threat to the energy producers in the Gulf of Mexico before the end of the month. Last week though, the Energy Department reported that U.S. inventories of nat gas jumped 103 billion cubic feet for the week ended September 10^th.

Solar energy has not fared all that much better than natural gas this year. The Claymore/MAC Global Solar Index (NYSE: TAN) has declined 22.3% year-to-date. TAN has been showing signs of life more recently however. This ETF is up 9.0% over the past three months while the market has been virtually flat over the same time period.

Currency Craziness

The topsy-turvy conditions that the market has experienced this year have made safe-haven investments such as Treasuries become increasingly attractive. On the flipside of this trend, bets against such a movement have paid a hefty price. For instance, the ProShares UltraShort 20+ Year Treasury Fund (NYSE: TBT) has lost 33.0% on the year.

In the short-term, it appears that this theme is bound to continue. There has been speculation that the Federal Reserve will indicate that it is willing to ramp up its buying of U.S. government debt if the economy continues to falter. The Fed has already bought more than $28 billion worth of Treasuries since it rolled out a plan last month to utilize mortgage bond proceeds to fuel the purchase of Treasuries. 

There was no shortage of media coverage of the woes experienced by the euro this past spring. Traders have used the CurrencyShares Euro Trust (NYSE: FXE) as a vehicle to bet on the fate of the euro. Year-To-date FXE is down 8.9%, but this fund seems to have weathered the storm. FXE has had a recovery push up the charts to the tune of 7.0% since June 1^st.

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