Morning Update Feb 13, 2020

The natgas market, since 2017ish, has given me the feeling that traders are 0 forward thinking. In other words, the traders don’t seem to anticipate much. There is no reason to panic over this virus problem, but there is reason to be cautious. And to me, a reduction is the only real way to be cautious. Better to lose 5% and be cautious, than to be reckless and wait for a 25% loss.

My reason for reduction is built on the idea that the natural gas market cannot withstand even a small disruption in demand without the price suffering, even while prices are already this low. No matter how you spin the coronavirus story, it is still real and still has affected the Chinese economy at minimum.

on with the reduction, I’ll look at the rest later…

I”m reducing UNG back to 75% holdings. This is really a minimal loss, but my breakeven from inception is $15.8 or $15.71 if my UGAZ gains are included. This leaves me in a tight spot; I can only be content that I am not holding UGAZ. My account is down by about 6%. Had I been holding 75% of UGAZ right now, I may be down 20%.

I can’t help but feel the coronavirus is being hyped up by the media. Any news of coronavirus spreading heavily to other countries, I’ll take that as a real sign to be all out of UNG. It is important for me to make this clear. It is bad enough that China is being hit with this, but any major outbreak into another country confirms the fierceness of this issue. Please be cautious right now.