Morning Thoughts – Waiting

I’m not even sure what to say here today. I’m distracted by speedometers and vaccines. Vaccines, of course, are good for Oil and Gas since it will help boost demand. Well… Good for Oil anyway. Natgas is getting consumed at a strong rate regardless. Oil being suppressed was good to keep associated gas output down. Since oil storage is evening out; prices will start to recover, and producers will get back to work.

My one thought about oil is Iran. Iran is exporting Oil anyway, they have Chinese and Russian support. But if US sanctions are lifted, with Biden in office…. And Iran is shifting presidential powers I guess? All these changes gives rise to risky decisions, like Iran saying they are going to do what they want, like exporting as much oil as they want, spurring drama in OPEC, and potentially flooding the market? I don’t really know… It’s just my paranoia kicking in. Of course, if OPEC gets into a squabble and floods the world with oil again, it will keep US oil production down and associated gas down as well. It’s always something.

Besides all that, I’m still holding.

My positions as of Pre-Market 11/24/2020

KOLD is currently showing a profit for the last covered put I placed. And I’m showing the wrong expiration date for that thing. How about 12/18/2020. I copy and paste each line when I enter a new trade, then forget to change the date. Also, I may not be at such a profit, as the bid/ask for KOLD options is not very good. I still feel good about the position of all my trades currently. Well… All my gas trades anyway.

There is a strong chance I will reduce UNL by the end of the week. right now it looks like it could be as early as today. I moved my limit up to $8.25 for now. It’s the lowest ask price on the exchange right now. Since it is 100 shares, it is showing up as the ask for UNL. That’s not important, just kinda cool. Anyway, If Natgas continues slowly higher today, I will lower my UNL ask down to $8.15 or take $8.13 if prices just stop there. I like to reduce when holding a rather large position. I always will. It has kept me out of trouble for the most part.

As for UNG, I’ll just hold on to it. If I reduce UNL today, this will give me some room for more UNL or UNG down the line. It will take some time, but the market will respond to any decreases to the storage surplus, and it is still coming. Patience

Oldinvestor

Morning Thoughts – Slow but Steady

It’s Thanksgiving week, so the markets will be closed Thursday, but Should be open Friday. Maybe the stock markets will close at noon on Friday? something like that. The EIA Natgas report will be on Wednesday this week, hopefully at the same time as normal.

Natgas “should” trade a little slower this week. With bearish weather, and storage acting as though it was going to fill to the max, prices are, what I would consider a bargain. Storage will not fill, but the threat of such an occurrence got our attention. There should be draws on storage from here on out. It will be a matter of when the surplus will be destroyed.

I’m going to refer to the latest free Bluegold article and move on to my positions, as I have not much else to say today.

https://seekingalpha.com/article/4390775-natural-gas-prices-will-rise-even-weather-forecast-remains-unchanged

My positions as of pre-market 11/23/2020

It’s looking like natgas isn’t going to get on a run up any time real soon without some major cold. The likelihood of a cold blast is always small, so I will plan on a slow, bumpy ride from here.

I am still interested in reducing UNL by 100 shares at my average of $8.13.

As for UNG, I may just dump it the day it sees a profit? I’m not sure. I suppose if it comes quickly, I’ll exit. if it takes a while, then I may place a stop once it crosses above my average. I will be looking into this and post it as soon as I make a decision. Good Luck

Oldinvestor

Tradingview is having a Black Friday Sale. I don’t think I get credit if you do the sale, but it’s a good deal.

https://www.tradingview.com/gopro/?share_your_love=oldinvestor

Morning Thoughts – Boring Friday? Maybe

It’s supposed to be slow Friday, yet someone already wants something… Fine. Let’s make this quick. Demand has sucked, mostly Residential/Commercial demand has sucked. But this is related to super bearish weather, and the average will even things out. For example, the forecast has shifted a bit cold from a couple days ago to now. So prices got on a rip yesterday due to weakness in demand, and storage threatening to fill to max capacity. We know storage can’t fill to the max at this point, but it is still influencing market until a stronger draw season has come around. All this has been overshadowing the lack of production that isn’t going away now anytime real quick. Weather will also swing bullish at some point, and prices will react the other direction. I’ve loaded up on UNL. As long as UNG isn’t crushed, I’m all set. And my average is decent, and if prices fall from here, I can always cut it off for a relatively small loss.

So I added 100 shares of UNL at $7.95, I’m content with that. The last price for yesterday shows $7.85, but should open closer to $8 today if natgas prices hold where they are. If prices rocket up to my break even of $8.13, I will reduce the 100 shares. If prices don’t make it to $8.13, I’ll hold the total 250 shares over the weekend. UNG will be held for a while now. I have not been so focused on UNG, and got a bit ahead of myself. I’ll just wait to see how things are going to make any changes to UNG. It’s pretty well stuck right now.

1 order to reduce UNL at $8.13 – to reduce by 100 shares. Hold the rest. Oh crap, I entered another KOLD covered put for December expiration. I considered rolling the first covered put back to December expiration to be able to manage it more closely. I’m not going to do this, I’ll just hold it where it is. The latest KOLD covered put is a 45 strike, and a break even of $49.61. I’m pretty happy with this trade; it will expire in December and I’ll have a chance to roll and reposition if I choose and the market is calling for it.

I have updated the BBB strategy with the latest results, and they are bad. I don’t have much to say, except I’ll probably be back to the drawing board on that one.

Click here to see the BBB strategy update

Hope the weekend is good to you.

Oldinvestor

Morning Thoughts – New Opportunity

Now that I’m getting crushed by Natgas (not really), I have a chance to take advantage of this downturn.

NGF21 on Daily Chart at Tradingview.com Proposal Head and Shoulder pattern

It is certainly shaping up to look like Head and Shoulder could form, but there is a while to go before this potential. Also I don’t believe this will happen, I just saw it on the screen. I would just as well believe we get some kind of bounce here and possibly a turn around. Or we crash through the neckline and go down further.

Fundamentals are pretty much holding to weather related demand right now. Weather sucks, and it’s dragging gas down with it. Granted, this wouldn’t be such a big deal if storage weren’t flirting still with max capacity.

I exited SLB yesterday, as posted. I made $55 on that trade, and that has kept my account from looking like total poo during this moment while gas tumbles.

I’m going to increase my UNL position. I could be much too early on this idea, as usual…

If the price keeps going, it will open an opportunity up to roll heavily into UNG or even BOIL. I will be waiting a while, like if NGF21 goes to $2.50. And… It needs to get there fast, for a quicker return. The market is starting to get excited in a bearish way again, there is room based on market maker positioning, so no need to get excited to go long.

My positions as of pre-market 11/19/2020

Right now, I’m focused on adding to UNL. Another 100 shares. I will be using 100% of my cash and start to borrow from margin, but last month I paid $2 in interest, so I’m not so concerned about that as I am about keeping the trade alive and attempting to manage the risk.

Here’s one last look

Monthly UNL chart at Tradingview.com

I’m going to leave it at this. I like this entry. I would like to get in at an even $8. I’ll probably end up with $8.10 to $8.15 or so. I’ll be fine with that. EIA report is today, at 10:30 est time.

http://ir.eia.gov/ngs/ngs.html

With as much drop in price as there has been, support could be waiting until the report to get in. Not highly likely, but a guy can hope… Good Luck

Oldinvestor

Morning Thoughts – Waiting…

With storage still recklessly near full, and now draw season has been flipped from one of the earliest to one of the latest… Of course prices are reluctant to rise. Everyone is talking about weather… Bla. Weather does poses the power to swing demand from one day to the next more than any other factor.

I’ve preached this enough. Rolling back to 2016.

EIA natgas storage surplus/deficit vs pricing for Nov 04, 2016
EIA natgas storage surplus/deficit vs pricing for Dec 1, 2016

In 2016, there was an increase in storage surplus from November 4 to November 25, yet there was also an increase in the price of natgas.

Daily price of NGZ16 and NGF17 at Tradingview.com

The EIA is reflecting some price jump due to changing from Dec contract to Jan. Much more than this, there was a large increase in pricing between these two dates. This was due to a large incoming cold spell that was to swallow up the inventory surplus and actually create a deficit to the 5 year average. The reason for the increase in the surplus during this same period as prices increasing, the EIA is behind a week and the forecast was calling for extraordinary cold to come. So bearish weather drove demand down, which drove pricing down, and a flip in the forecast along side a forward thinking market that drove prices back up before the surplus was swallowed up.

Daily CDD+HDD vs Long Term Average of 2016 at RonHenergy.com

It looks as though the cold didn’t come until almost mid December, but the swing in HDDs was from extreme bearish to extreme bullish. Of course the market dropped after this big swing thanks to more weak demand.

Daily CDDs+HDDs for 2020 at RonHenergy.com

Since I’ve watched Natgas play out for almost 5 years now, it seems the market is more complacent or just simply waits longer for evidence of anything these days. Anyway there has been this extreme bearish moment for demand, followed by more neutral HDDs, but the forecast continues to disappoint. This, along with storage in the 90th percentile, is a bad combination. I keep in mind how quickly things can change.

My positions as of pre-market 11/18/2020

I’m back to my normal duties today, holding some pretty horrible positions now. SLB is looking like it’s time to exit. Of course I shouldn’t have rolled the call down to 17, but that’s hindsight crap, the trade still did well. $65 gain is sizable for this account. I will be looking to try and exit SLB today, and will continue to hold all other positions. Good Luck

Oldinvestor