Morning Update Feb 5, 2020

A major shift in the weather forecast, imagine that. So the weather forecast covers 15 days and there no small grouping of days that shifted warmer. Almost the whole forecast shifted warmer a little, causing a big change in the total number of heating degree days. Overall, the forecast now shows temperatures will be slightly warmer than the 30 year average. That’s enough in this market to send prices back to the bottom of the range.

NGH20 on 1 hr chart at Tradingview.com

Natgas pricing went to the top of my new range and tried, but failed. Did I mention it has been a while since I had to deal with unsettled funds and Good Faith Violations. Not because I have soooo much money, but because I haven’t utilized the full amount of funds in my account since Nov 2017. My 401k account could be worth $1MM and still be required to live by the same rules at $1M account. I’ll be careful of this from now on. There is a two day settlement period I just have to watch out for.

Anyway, I didn’t see any other fundamental reasons for the price to fall, with one exception. LNG still has me on edge. Lets keep this simple. If weather keeps promising cold and then disappoints, only to promise more cold the next few days…. The market should continue close to these ranges. If weather turns unseasonably warm, the price will probably fall further, maybe to $1.75. If LNG export facilities make a statement or just stop flowing gas without a reason, such as maintenance, the same or worse most likely will happen… $1.75 or lower; and probably quickly. With that said, I am again in no rush to switch to UGAZ, only to start losing a ton of money. Not knowing is what makes surprises happen, but we can at least understand what to expect from here.

This morning’s fall was met with a bounce; I don’t feel that bounce will hold up. I’m in a position to be patient, holding UGAZ that I would still like to sell near $46 (today I can sell if I feel the need). I have unsettled funds that I can use to buy UGAZ, but would not be able to sell until tomorrow, so I have to be careful of that.

My current positioning: I’m holding UNG with 89% of my funds with an average of $15.56. I’ve adjusted this and need to explain it soon. I have been working on sheet just for my trades, I’m having a bit of trouble deciding how to present it so I’m easily understood.. . I’ll be holding on to UNG until the market turns or I decide to convert more to UGAZ. I’m holding roughly 4% of my funds in UGAZ at $42.8. With what I sold at a loss, my break-even for UGAZ would be $43.28. As I’m typing this the price is again falling. I have an order in to sell UGAZ at $46.2, I don’t think that’s going to happen today. I’ll be patient to the down side, no plans to buy yet. Good Luck

Oldinvestor