Morning Thoughts – Cash is Weak

EIA.gov Natgas energy dash board and Natgas Storage Report

East storage was a build amidst a total draw on storage. East cannot hold much more gas, being at 96% full. But this is what I was hammering on the last couple months. This is influencing “spot” or “cash” prices to drop, which is also influencing NYMEX pricing one more time before draw season really kicks in.

Weather is a culprit this time. Luckily, thus far, production and exports are still in line with sending prices to $4 this winter. I fully expect there to be drama with LNG at some point. Natgas has become global. barf… This is why I hate trying to keep track of Oil, I don’t have enough time in the day to read about what the hell is going on with Saudi, Iran, Iraq, Libya, Syria, Venezuela, Kuwait, UAE, Canada, Mexico, and then the USA…. I know with a more macro scale, Oil can be traded without catching all the drama.

Anyway, I’m adding long UNG and UNL.

My positions as of pre-market 11/6/2020

I’ve added 10 share of UNG and 20 shares of UNL to my holdings.

The weak cash picture will dissolve fairly quickly now that draw season is upon us. To me, this feels like a last chance to get in long. No doubt there will always be disturbances, but maybe not this good. We’ll see.

As for my intraday trading strategy, it’s still running. It will take another 3 months to see if it will be as consistent from here, forward. I’m going to try and create a page for this. I may just stick to weekly updates on it. There are about 100 more ideas to test as well, and 1000s of combinations, so there’s that…. I’m going to see what I can get done on that, and come back to this post and share a link.

I will most likely add more long today. Natgas prices may fall a bit more, but let’s not forget how undersupplied the market is. Just keep it manageable, by not taking on huge bets, especially with leveraged ETFs. I rode that ride once; it was a lot of fun until I almost threw up… UNL is worthy of a fairly large position, in my opinion. Being spread over 12 contiguous contracts, UNL is the perfect long term bet on Natgas, when it comes to ETNs.

I hope everyone’s weekend is great.

Oldinvestor

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