And here I was, thinking the weather forecast couldn’t get much worse. ECMWF lost almost 23 HDDs overnight. 23 HDDs is pretty extreme, and sometimes calls for a correction in the next forecast. We cannot count on this, so the plan is to just be patient. I will be sticking with my original plan and continue to layer into UNG. Seeing profits twice now and not capitalizing on them, I’m going to adjust back to reducing each time I see profits without a significant signal to hold longer.
Today prices gapped down past my breakeven average, so there was no option to place a stop. So I’m stuck holding 30% in UNG at this point. I am not so concerned by this, since I believe the price will get back to $17.32 soon enough. The market continues to create lower highs, staying in the down trend pattern. The supply/demand balance has “tightened”, meaning demand is getting closer to keeping up with supply. This being the case, I believe weather is having stronger influence on pricing. The overnight drop in HDDs is a larger than normal change from one forecast model to the next, which is mostly likely the reason for such a drop in NG prices.
Anyway, enough rambling; had I reduced yesterday, I would again be in a position to add this morning. I will now be placing a limit to sell 1/3 of my UNG position at $17.32 in order to reducing my holdings if we see a rise in price today. The EIA report is today, at the same time it normally is released. Prices could do anything. If UNG happens to dip, I may add. I will post to Twitter as soon I make any moves. Sorry for the late and sloppy posting. Doing this from home isn’t the easiest.