Morning Update March 9, 2020

I’ll go ahead and add to UNG now to put my holding back to 75%. I’m publishing this now, then will finish with the rest of this post. Buying now at $12.65 with roughly 5-6% to put me back at 75% long on UNG.

Ok, my account is down about 11% right now, this is not too bad considering all that has happened. This may be the worse down trend I’ve survived, and the best I’ve ever done surviving a down trend. Not to mention, what was once far behind the S&P when I began sharing this account, is now about even with.

Geez, I’ve been assigned on one leg of a UVXY spread I took. hmmm, guess I’ll get to manage that soon. Warning to robinhood traders. When you are assigned in your robinhood account, they will not show a short position in your account of -100 shares, and they will not allow you to manage it first thing in the morning. They will, however, take hours to manage the position, and there is a good chance they will lose you money, where you might have actually made money. I was assigned on SPY a while back, I knew what had happened, but was not capable of buying the shares of SPY because the account didn’t show -100, only a credit of about $33,000. Robinhood also would not allow me to sell the other side of the spread I was holding to cover the whole thing. It was really quite frustrating. Something most major brokerage firms would not allow to happen. The whole thing was not that big a deal on a grand scale, but it was huge for a $500 account. This UVXY option that has been assigned is with Schwab; I’m showing a short postion that I can manage at market open. I will lose a couple hundred dollars, but that was already true of the options spread I took in the first place. I cannot say this will always be the case with robinhood, but that was not a good experience for me because I was not given the opportunity to manage the trade myself.

I think most of the financial market is scrambling in one way or another this morning. I feel their pain a bit. I think I’ve said this before, I should probably stick to gas. About that… Weather is actually showing some bullish signals, but literally no one cares! haha

Production is showing a recovery from the 1 Bcf/d drop that I spoke of the last few days. So the price of oil, haha, there’s an over dramatic mess. So the price of oil was/is down some 20% from Friday. I remember thinking oil production is going to just stop or fall like crazy. This is really not the case, production may actually increase. The only way for a company that drills and produces oil to make enough to pay their debts, is to produce oil. Drilling rig counts are going to drop drastically and even some completions crews will be put on hold. Production will continue, if not increase because the oil or gas producer has to sell oil/gas to pay the bills.

hmmm, I must go. I’ll continue this rant later. still holding UNG with 75% of funds. Looking for $1.5 for Natgas pricing to get all in.

Ok, back… I see gas has decided to move higher, in a significant move. It would appear the market isn’t going to $1.5. It is forward thinking here and some traders want what they would consider to be a bargain right now.

The market is about to open and I’m about to get busy. Drilling rigs will fall, oil will take forever to slow production. Gas is already falling. The real story right now is this idea of in order to keep production at the pace it is now, a major expansion in drilling would have to happen. This is a longer term idea, like at least going into next year. The big IF right now is still the coronavirus. If it doesn’t wreck the global economy, or rather shutting down everything to prevent the spread…. Then being long on gas is worth the risk. The best thing going for the long side right now is pricing. Prices are low enough production is not going to trend up from this point forward, it’s more a matter of how much of a hit does demand take in the following months. All eyes will be on LNG exports.

I’ll be holding my 75% of funds in UNG for a while I think. I will probably shave a little off again. Maybe even later this week. Good Luck