Morning Thoughts – Oldinvestor

Production is as 2 year lows, power burn seems to be hanging in there, LNG is returning with strength once again. This may be one of the highest imbalanced markets I’ve seen since trading natgas ETFs. Production should return to pre-hurricane levels any day, but the under-supplied market will reach the 5 year average very quickly here. I’m going to start buying UNG dips.

Current Positioning as for pre-market 10/13/20

I’m still $124 behind with my SLB trade, but if it will hold here, another decent roll and I’ll have survived a sour trade. I’m willing to wait on SLB.

Anyway, moving on. I feel like I should reduce UNL, only to make room to add to UNG on any dips. I’m going to play it safer and wait for the dip to occur and roll out of UNL, into UNG. For example, if UNL goes back to $8.5, I’ll sell down 20 shares of UNL and pick up maybe 20 shares of UNG. UNG is priced higher, but I do have some extra funds in my account to cover the extra that UNG will cost. Otherwise, I’m holding UNL and will wait for $10 before selling any.

Last up, I wanted to share this, it’s a great tool to gauge the price. I think it’s a great tool anyway.

EIA Energy Dashboard

This is a scatter plot comparing storage to prompt pricing. You can click the image to go to the EIA website. It is obvious where price will stay in a range, based on how much of a storage surplus or deficit there is. I’ve always been a bit early on direction, and struggled with pricing ranges. This is going to help me, and I’m going to use it a lot until it proves I can’t rely on it. So right now, the top of the price range can be assumed to be $3.5. As storage moves closer to the 5 year average, the range will open up to a max price of $4 and so on. You can also use the for storage. If you go to the link, you can click on each dot, or even download the data and plot it yourself. But you can use the chart to also look at how fast storage has historically moved to more of a surplus or more of a deficit. Something we can count on, is that storage is going to move closer to a surplus or a deficit, and price generally follows. This is the perfect chart. Use it to your advantage. I’ll be holding what have and looking to switch to UNG or maybe even a little BOIL on any serious dips. Good Luck.