Morning Thoughts – Technically it’s holding

Usually when there is a substantial move intraday, there is a portion of that move that will move back due to profit taking. At least that’s the assumption I’m under when the price corrects right up until pit close for NG trading.

Holy crap, I just saw something about “sovereign citizens”… That’s a real thing? If people spent all the effort that is exerted fighting the system, and applied it to real work, they wouldn’t be looking over their shoulder all the time. Jeeeez…

Back to Gas

UNG on 5 min chart, very supportive market right now

If you’ve traded gas much, you should know by now NG can turn on a dime. There are times it’s follows through with technical indications of support/resistance. Hopefully this is one of those times. In the chart, you can see the dip around 2pm eastern time yesterday and then prices snap back up shortly after. Prices are again holding this morning. Weather models don’t look so great; so I settle with the idea the market has decided prices were a bit too low. All-in-all, prices are following changes in weather quite closely.

I could make a move here. I could reduce a bit to protect, or I could see this as a sign to pile in long… It’s Friday, pricing is half way back to what I need to break even. I don’t feel I need to protect by reducing my position. I don’t want to get heavy on this trade here because it’s Friday and the whole thing could blow up in my face over the weekend. So I’m left waiting a little longer.

My positions as of Per-market 12/11/202

NG supply is roughly 5Bcf/d under what it was last year. But last year supply was far too great, and exceeded demand. Also, 1 HDD difference can pretty well make or break 5Bcf/d loss in production. Winter weather has been quite horrible for the last 5 years, along with strong production numbers. All this influences the 5 year average for storage. All the market needs is slightly better than horrible weather, and it already has a boost from production losses. This will keep me long unless production continues to make new recent highs, which does not seem the case right now. I obviously got sucked into the idea that gas was going to make new highs, and this failed, and may continue to fail throughout winter… Nonetheless; I have to hold for I believe prices should still recover to at least my break even. Now I’m rambling. I hope you weekend is a good one. Good Luck


Leave a Reply