Morning Thoughts – Oldinvestor

Everyone and their sister is projecting that storage is going to move much closer to the 5 year average over the next 4 weeks. Like 100+Bcf closer… easy… in 4 weeks… Prices should continue to inch higher. I want to dump UNL on the chance that there may be a small dip, but there is no way I’m doing that. The chances of UNL going to $10 is not so strong yet; summer 2021 contracts are just under $3. But this should slowly shift higher as storage gets swallowed up. The natgas market has already shifted to a bullish mindset. Managed money has been long in a big way for a while now.

DCOT Long vs Short positioning at RonHenergy.com

I’m ready to start playing the market back and forth more, I should not be such a permabull. Or I can be permabull and still accept there will be dips in the price. I think I’m going to give BOIL a chance. BOIL has rolled to January contract, so the storage drama will not effect BOIL. In fact, the last two days UNG has made larger % moves than BOIL because UNG is still partially invested in November contract, while rolling out to December. Nov/Dec contracts are just moving that much more wildly than Jan. And the reality is, I could have also made money on UNL; trading it back and forth this whole time, I mean…. So maybe I should reduce a bit today, and start buying UNG/BOIL on any dips.

Positioning as of pre-market 10/16/20, KOLD position as of market close 10/15/20

Looks like KOLD position is up, but I’m sure I could not get out of the trade for that. I may hold on to that one for a while.

So my mind is made up. I know I’ll change it again before the day is over, but right now I’m going to reduce UNL by 20 shares to an even 100 shares. I will most likely hold the 100 shares of UNL, and simply add to my account with UNG. I am going to wait until next week to buy anything. So today is a reduction of UNL. Oh, and I exited LABU, that was cool that I was able to short it, and even made $3.5, but focus…. As for the market itself. Natgas couldn’t get much more wild that it already has the last few months. I do expect things to settle just a bit, but also expect a big bull run at some point. Storage will dictate the size of the move and how long it lasts. Trade small. Good Luck

Oldinvestor