Morning Update Feb 17, 2020

Though the stock market is closed today, NG futures are still trading. Looks like with some cold being added to the forecast over the weekend, prices opened noticeably higher. The market is still not concerned about the coronavirus, at least not to a point it is a topic of serious discussion. It is possible the market has already priced in the idea that the US has flooded the global LNG market. Or it is possible the market just doesn’t care about a slow down in LNG exports until it happens. I’m sticking with the last idea.

The chart has shown RSI divergence of a while now, and has confirmed a break away from the down trend.

NG1 on Daily chart at Tradingview.com

Sometimes I have trouble posting a clear picture as to my reasons for taking or holding off on a trade. Right now I’m holding off on the long side, or rather, I didn’t take on more of a long position on the last dip. A move that cost me. My reason for caution right now is based on the LNG market possibly being oversupplied. When LNG exports took off like a rocket, it was seen as the savior to any oversupply in the NG market. Now the LNG market may get backed up some, and LNG exports are still the biggest demand growth factor for the NG market. I’m sure there is some very expensive suppliers of LNG data that I cannot afford to clear this up for me. In the mean time I feel I must be cautious. Since LNG is still the biggest growth factor for demand, yet has the most potential to get held up, I must remain paranoid.

Anyway, enough of that. Of course I cannot trade today since the stock market is not open. I will still be holding 75% of my funds in UNG. Right now the price of UNG would be near $14.75. If prices continue higher tomorrow, I may consider another reduction, maybe in the from of a stop. Patience…

Oldinvestor