Morning Thoughts – Oldinvestor

Well it’s still hot out, LNG is climbing ever so slightly, and Production is holding thus far. South Central Storage is still building at a inconvenient time. So I’ll still be holding my ground. I believe the market as a whole will continue to grind higher along the curve ( so I continue to hold UNL, though it may slow it’s upward trend). I think prompt NG is still at potential risk of plummeting, so I’ll continue to hold my BOIL covered puts and no UNG yet.

I will not argue against the potential of another bull run higher, even from here; especially with LNG yet to move higher and this complacent market making last minute decisions. I haven’t mentioned this much in the past, but even from 2016 to now, there seems to be more followers than trend setters in the natgas market. It’s not so much that traders aren’t anticipating changes, as I believe it is the number of trend followers has grown. So trend traders, technical traders, and “quants” may not be so interested in fundamentals and anticipating anything; they are only interested in catching a wave. So right now the market is riding the wave, and the number of people who don’t care about what’s going on with South Central or Eastern storage figures, far outweighs those that do.

I want to believe this would explain why the market seems to take too long to change direction and why it seems to go too long in one direction. It does seem “the trend is your friend” is much more common than “swing freely” or whatever…

My positions

UNL – 50% of my max comfort is still in with an average of $7.4 and waiting forever

BOIL covered puts

BOIL Covered puts as of market close 8/14/20
Covered puts Profit/Loss as of market close 8/14/20

There is a lot of controversy surrounding DGAZF, in that is may also be influencing the market to move higher when it normally wouldn’t be cause of the number of short contracts VelocityShares would need to cover in October contract. I think the whole thing is more mental than physical. This is hard for me to swallow; that even 1000 October contracts being bought back would move 12 consecutive contracts by 2-3% in a single day.

I’m going to wait this week out with what I’m holding. If the market keeps moving up sharply, I might increase my short by covering a put and holding the shares short. The market will have to move pretty high, as in October contract getting very close to $3. Let’s see what happens. Good Luck