Nothing new today. It appears the Dec pricing is on track to fall to $2.45ish. From there I’m clueless. Maybe we’ll know more when it gets there. I would normally be short here, but for personal reasons I’m staying out. Sorry for such a short update.
It’s Friday! Boring Friday… I’ve shared 1hr chart with one idea, Dec gas price snapped out of the down trend into this slightly range bound channel. The reality here is, I don’t have a clue once it breaks from one of these channels. I’m still leaning bear, I’d like to see the price meet the upper line and if it bounces off, go short. If the price falls today and breaks the lower line, might go short, but keep it small and don’t be surprised if you get a lot of turbulence on the way to $2.5. JDGPRO on Tradingview shared a head and shoulders pattern (when you zoom out a bit) that fits with my lower line of support. This would reinforce my breakdown theory. I’m looking for a short, but will be waiting for long potential closer to the lows we’ve already seen.
As for fundamentals No significant changes in weather, or Supply/Demand at least on the large scale that I can see. Broken record tells us the market is still very oversupplied.
The only bright start still is LNG growth, which on a macro scale is about to fizzle out as well. I’ve been seeing snippets of news about the global LNG stage reaching a point of oversupply. Time will tell and maybe a little research is needed here. For example, just searched google for LNG oversupply and here is an article from NGI (Natural Gas Intel). This article talks about LNG on the global scale. It’s a bit lengthy for just a morning skim. Save it for when you have time to focus. Plenty of good details worth hearing.
I normally end with my positioning and expectations for a trade. I pretty much covered that above. I’ve got a lot of work to do with the day job, and this week has been good to me. I’ll mostly likely end the day where I’m at, waiting for next week to begin. Hope everyone has a tolerable to exceptional weekend.
Same thing, different day. The market is still oversupplied, winter is still “on the average”, the trend is on a slow grind down. The market wants to fall.
Daily chart shows a couple of areas of support, but winter trading momentum has appeared to have taken over once again. We look to be on target for $2.5, below that I don’t know. That may be the point at which I consider going long.
Sorry for the short message, today just feels like a continuation of the week. Since we’ve had such a strong move this week, I would like to think we will get a bump in the road at some point soon. It could happen at any moment, but tomorrow is most likely.
I will be watching around 9am Est. The market gets stirred up around that time. If we take off to $120 today, I will cut it off and sell out. That will be biggest move of the year and I’m blessed to achieve it. I will also sell out at $109 today and call it a great week.
This is the current forecast 6 hours from now. We see the lines move up under AK (Alaska) and the down across the midwest and sharply swoop down into the Northeastern US. This is the perfect pattern for a spike in NG demand. Since this is the forecast for 6 hours from now, it’s pretty much guaranteed to happen. I believe in 10 day forecast, beyond that it’s an educated guess, but still about as much a guess as truth.
This is the 120 hour or 5 days out, you can see the lines are flattening out and no more cold being slung down into the Northeastern US. So cold temps in high population areas will subside, people will not burn as much gas to stay warm and consumption that had skyrocketed will drop back to about average use.
I should confess I was looking at NG1 and thinking gas had a ways to go before reaching the 20EMA. Looking at Dec contract without the influence of NG1, the price has already crossed 20 EMA and touched the 50MA on the daily chart. Being that I’m a bit green to technicals, I will look into further the use of NG1, which shows Nov contract until expiration, then Dec. For now I’m going to stick with displaying each contract and not use NG1 for short term technicals.
Moving on… the 2hr chart is showing some strength. I’d say the market has another hour to wake up and really give us a direction. I believe overall the price of NG will continue down this week, but not at the same pace as yesterday. There will be some bumps along the way, as normally is the case. The NG market is still far over supplied, weather forecasts haven’t given a signal to get excited, and the trend is simply down right now. I remain with 3.5% of my funds in DGAZ with a stop at $105. I think this is a bit close, but I don’t want to lose that profit so $105 it shall remain.
So I was off a bit with the intersection of 20EMA and NG1 price falling.
I misjudged where NGZ19 would meed up with 20 EMA on the daily chart. This is great, there is roughly 7 more cents for Z19 to fall, potentially sending DGAZ up another $7-$8. I chose to reduce 50% of my position first thing this morning at $107, this leaves 3.5% still in $DGAZ.
This chart hasn’t been updated yet, but it will show further weakening in HDDs, which in turn is helping drive the price down. Basically that cold cluster over the Northeast US is going to hit us hard, this week and by next week we should be seeing more average weather. Weather is never average, but you catch my drift.
Weather is my main reason for holding short into the weekend, but this is my reason for confidence in a Sunday gap down. I probably should have explained this friday afternoon when this report came out. Nonetheless; I did mention on twitter I would be holding. Short positioning had decrease drastically with this report, showing there is plenty of new shorts to be added. Also…
The two hour chart seemed to indicate the market was looking for reasons to drop. Thursday’s EIA report was strong and on or better than most estimates, yet NG did not breakout and hold and up trend pattern.
So culmination of weather, short positioning and 2 hr, led me to have confidence in the short side. Today’s Daily chart shows we have resistance around $2.6 with 20 EMA. I’ll stick with this and place a stop at $105 on DGAZ for the day. I want to keep the gains I have so this stop is close, it could get taken. I’m good with that, the % gain this time around has been closer to 1% on my account so I’m happy to place a close stop.