Morning Update Nov 14, 2019

I’m at a loss for a direction today…

What we have:

  • Split decision on weather forecasts, GFS vs ECMWF (typical this time of year)
  • Today’s EIA report could be build or draw, but will beat 5 year average
  • Weather adjusted out, we are still oversupplied
  • I think the market wants $2.5 Dec gas, but here we sit at $2.658

First, looks like I sold off DGAZ just in time. Yesterday’s rise in gas….. geez. My guess is there were a lot of close stops on the short side of the market, GFS spooked the market and stops were triggered, people wanted those profits more than they wanted to ride it out. Just like myself in DGAZ.

NGZ19 Nov 14, 2019 Daily Chart from Tradingview.com
NGZ19 Nov 14, 2019 1hr chart from Tradingview.com

Where do we go from here? I don’t have a lot of confidence to say one way or the other. With a gun to my head, I’d say up a bit more then more downside. 1hr and 2hr charts show price hit the upper BB and pulled back some, and are both pointing up. It is Thursday, I’m planning to wait for the chaos to settle. I’ve just gotten out of one of the best trades I’ve made all year, no need to ruin it.

My hope here is the price moves higher and sets up for another short attempt. Something to watch out for that seems clear to me now; new short positioning is looking for quick profits and will be quick to get out. If that holds true any downward movement may see more jumpiness this winter. Winter will cause wild swings, but in the end, we are still oversupplied, and storage is still very high. Upward movements will remain limited this winter. The one exception to this is if winter weather gets below average temps and stays there more often than not. Even then, prices will still be under pressure until later in the winter season.

Being that the price is where it is, I’m waiting on a rise above $2.7 (maybe even $2.8) or fall below $2.5 for December contract before I get to excited about getting back in. Today’s EIA report should be fun to watch though.

Oldinvestor

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