Morning Update March 12, 2020

The WHO… or the CDC? declared coronavirus a pandemic yesterday. Everything is down, No surprise Natgas is down as well. Even Silver is down? Silver! I guess the world is not really in full panic mode just yet; Silver is down. I did a quick search on that, and high demand countries are been hit and high producing countries have not been hit by coronavirus yet. So maybe this is your golden opportunity to still get in Silver. Maybe not. I started buying a little SLV, and of course it’s down 15 cents. Not in this account, but in my 401k.

UNG! I reduced just in time! Down to 30% holdings in UNG, I saw green yesterday! I’m super excited. Even though I’m in the red a little again, I’m way ahead of the S&P from where I started blogging about my Natgas adventures!

P/L% of my example account (from inception) vs S&P 500

Yesterday was great. It’s such a good feeling to be right about this market, if only short lived.

Production is holding. It’s not an easy task to gauge whether there is an over or under supply of gas. At the moment, I would like to think the Supply/Demand balance is right on the fence. One hell of a time for it to be there too. That just gives the coronavirus drama more sway over the market. I really feel it’s important to be patient today, the market has shown it’s just not ready to break out. Oil did excite the bulls; a much needed mental boost. As I preached in the morning update yesterday, production will not simply stop because oil prices fall. As for gas fundamentals, everything is still about the same. Production is holding, and is still on a slight decline. That decline thought, is due to declining rig counts all of 2019. After looking at the oil figures yesterday, I’m a bit surprised oil hasn’t already started to decline from oil rig counts dropping as well in 2019.

I am still glad I adjusted my strategy to be more conservative.

NG1 on daily chart at Tradingview.com

I do want to point out how volatility has increased. I built this little script a while back that puts the candles side by side to compare size. I posted a newer version of this one and there are some other scripts in my profile at Tradingview.

https://www.tradingview.com/u/oldinvestor/

I haven’t really pushed Tradingview much. I think they do an exceptional job with charting, and their scripting capabilities. I wish I could automate trades with them. There is actually a link to refer a friend. Tradingview is free to use on many levels. If you decide to sign up for a paid subscription, I get some kind of credit if you sign up through this link.

https://www.tradingview.com/gopro/?share_your_love=oldinvestor

I’m not here to promote Tradingview, I just like their service.

So I’m 30% in UNG now. The price didn’t quite make it to $15.5 yesterday, but you should know by now that I’m going to trade early if I’m watching the market. This is a prime example of why I’m paranoid. I had a target of $15.5 and the price only made it to $15.47, then turned and dropped. I’m tempted to buy a little since gas prices have fallen 20 cents from where I reduced. I’ve been light on this the whole time, and I’ve spread out my layers very far apart. It couldn’t hurt to tighten things up a bit. I’m going to go ahead with a little over 5% here at $13.85. This will put me at 35% in UNG now with a new average of $14.45

I’ll reduce the 5% I just added if the price gets back over $15 today. I am also placing an order to buy 5% more at $13.02. I’m ok with walking into more UNG with these small amounts at random price points. I like $13 because it is close to the lows and the market is a little more bull minded right now, but I am not interested in taking on a heavier trade unless we see fresh lows. If UNG trades outside this range today, watch for updates on Twitter. Be careful in the weeks ahead, and don’t buy SPXL yet, bla… Good Luck

Oldinvestor