Sunday Note – Weekly Candle comparison – March – Yoy

I’m always trying to find some different way to look at the chart. I found this and not sure if it worth sharing, but here it is. For the month of March each year… Weekly candle heights compared, from low to high and open to close. I don’t have a lot to say, as far as analysis goes, just that the market appears to be tightening the last two years. I would argue right now that the market is waiting for a fundamental reason to move harder. I built the study used at Tradingview.com; I will share them so everyone can play. As always, I’ll share the code as it is not worth keeping a secret.

I’ve published the study on Tradingview here

I’ve published the script used in the study here.

NG1 Weekly comparison of Open/Close and High/Low for March YoY

Random Update/Thoughts

I just got to read my first email from a reader! How exciting. I am thankful for all the feedback I’ve gotten on Twitter, and now my first email.

To be blunt? This week has kinda sucked. I work full time, have a full time family (Whom I’m am grateful for and love very much). Sometimes life is just chaotic, and the challenge becomes more than we can keep pinned down. I’ll get ahead of it again, like now!

The market. What is up with this natgas market? From a storage/supply/demand perspective, I have no idea. There is so much that can be considered late bloom, then there are those moments you want to take a risk. Is now the time? I know that makes no sense

Storage is always a major focus, well….

NG storage vs 5 year average at RonHenergy.com

Storage doesn’t look all that out of control vs previous years in comparison to the 5 year average. I don’t need to post the pricing to compare each year to each year of storage here. Storage is not the problem, obviously. So production?

Production stats by Bluegold Research in a free article

Bluegold posted about the time I started my post so it’s recent data. The above chart shows the recent declines in production. I’ve been looking at this same stat as year-over-year chart; the continuous chart looks much more defined (if that’s the right word). There has been quite the fall in production from the peak of total dry gas production.

Production was my main focus the last couple of months. It is hard to say that production is going to continue this down trend. Reading “reductions in CapEx” a number of times has given me the impression that natgas production is all but done growing for now.

So if production really is on the decline and storage isn’t really that bad out of skew from the 5 year average, why are prices falling? My main concern is LNG exports, as mentioned in this morning’s post. Outside of that, it must be a self fulfilling chart prophecy reflection of 2015/16.

Either way, I’m going to continue on the long side of this. I will soon post my history of UNG trades and my strategy going forward. I hope everyone has a safe and fun weekend. Go Chiefs!

Oldinvestor

Sunday Update, Jan 19, 2020

I’ve been out last week due to a family trip. I’m back and it’s time to start buying UGAZ. Interest in the world of natgas is going to get dialed up a notch. Looking forward to it already.

Oldinvestor

Random NG notes Dec 7, 2019

Just taking a look today at the chart for a few moments.

NG1 as of Dec 6, 2019 close on 4hr chart at Tradingview.com

I placed a trade in my demonstration account yesterday (Friday, Dec 6). I went long on UNG with 5 shares at $18.03, this is roughly 9% of a $1000 account. Being that I am entering UNG, I feel safe enough with going backward some on this trade. I’ll be happy to try adding a couple of times. I’ve been fairly accurate lately; somehow ;P This means I’ve been making only smaller trades with smaller gains. This is fine. I feel good about it, and hope I continue feel the confidence in myself and stay in-tune with the market.

Anyway, the reason for going long now is… Managed Money is back at a record short ratio. You can go to RonHenergy.com to see this same data. The data in the chart below is thru Tuesday, Dec 3. So the rest of the week, the market has moved, but moved back to similar pricing, assuming similar positioning.

DCOT data thru week Dec 3, 2019 at RonHenergy.com

Keep in mind, my position is small. I also have been trading UNG, which makes my position even less weighted. You should know by now, I’m very paranoid of a long trade due to the oversupply of gas. Also, referring back to the chart at the top of the page, momentum is currently bearish. I am showing resistance near $2.28 on January contract, which could be an ideal double bottom. If pricing bounces at the 2.28 area, this could lead to a nice long run. If we break down through 2.28, this could lead to $2.20ish. The market had a triple bottom in October, so this should not be counted out as well. There is plenty of time to digest this next week.

Oldinvestor

Thoughts for Sunday Nov 10, 2019

Keep in mind I may come back and update this before open Sunday. Any extra notes I’ll extend onto the end of the post.

NG1 as of Nov 8, 2019

Friday’s weather updates shows some level of strength, maybe helping prices hold where they are. DGAZ didn’t get anywhere near $106, which may be a good thing because I would have sold off. Being back at 7% through the weekend. If the cold shown in the northeast US breaks apart, we could see gas gap back to $2.7ish.

DCOT thru Nov 5, 2019 found at ronhenergy.com

I feel that shorts will be slow to re-enter the market here, and short positioning may not get back to the extremes we’ve seen. That being said, there is room for new shorts to drive the price lower once again.

If we get anywhere near $106 on Monday, I’ll sell 50% of my position there. We’ll know more about the market and weather on Monday and I’ll make plans for the other half of the position at that time. It is possible I sell the entire position or hold for and even better price, for now this is the plan.

Oldinvestor