Random Update/Thoughts

I just got to read my first email from a reader! How exciting. I am thankful for all the feedback I’ve gotten on Twitter, and now my first email.

To be blunt? This week has kinda sucked. I work full time, have a full time family (Whom I’m am grateful for and love very much). Sometimes life is just chaotic, and the challenge becomes more than we can keep pinned down. I’ll get ahead of it again, like now!

The market. What is up with this natgas market? From a storage/supply/demand perspective, I have no idea. There is so much that can be considered late bloom, then there are those moments you want to take a risk. Is now the time? I know that makes no sense

Storage is always a major focus, well….

NG storage vs 5 year average at RonHenergy.com

Storage doesn’t look all that out of control vs previous years in comparison to the 5 year average. I don’t need to post the pricing to compare each year to each year of storage here. Storage is not the problem, obviously. So production?

Production stats by Bluegold Research in a free article

Bluegold posted about the time I started my post so it’s recent data. The above chart shows the recent declines in production. I’ve been looking at this same stat as year-over-year chart; the continuous chart looks much more defined (if that’s the right word). There has been quite the fall in production from the peak of total dry gas production.

Production was my main focus the last couple of months. It is hard to say that production is going to continue this down trend. Reading “reductions in CapEx” a number of times has given me the impression that natgas production is all but done growing for now.

So if production really is on the decline and storage isn’t really that bad out of skew from the 5 year average, why are prices falling? My main concern is LNG exports, as mentioned in this morning’s post. Outside of that, it must be a self fulfilling chart prophecy reflection of 2015/16.

Either way, I’m going to continue on the long side of this. I will soon post my history of UNG trades and my strategy going forward. I hope everyone has a safe and fun weekend. Go Chiefs!

Oldinvestor

Random NG notes Dec 7, 2019

Just taking a look today at the chart for a few moments.

NG1 as of Dec 6, 2019 close on 4hr chart at Tradingview.com

I placed a trade in my demonstration account yesterday (Friday, Dec 6). I went long on UNG with 5 shares at $18.03, this is roughly 9% of a $1000 account. Being that I am entering UNG, I feel safe enough with going backward some on this trade. I’ll be happy to try adding a couple of times. I’ve been fairly accurate lately; somehow ;P This means I’ve been making only smaller trades with smaller gains. This is fine. I feel good about it, and hope I continue feel the confidence in myself and stay in-tune with the market.

Anyway, the reason for going long now is… Managed Money is back at a record short ratio. You can go to RonHenergy.com to see this same data. The data in the chart below is thru Tuesday, Dec 3. So the rest of the week, the market has moved, but moved back to similar pricing, assuming similar positioning.

DCOT data thru week Dec 3, 2019 at RonHenergy.com

Keep in mind, my position is small. I also have been trading UNG, which makes my position even less weighted. You should know by now, I’m very paranoid of a long trade due to the oversupply of gas. Also, referring back to the chart at the top of the page, momentum is currently bearish. I am showing resistance near $2.28 on January contract, which could be an ideal double bottom. If pricing bounces at the 2.28 area, this could lead to a nice long run. If we break down through 2.28, this could lead to $2.20ish. The market had a triple bottom in October, so this should not be counted out as well. There is plenty of time to digest this next week.

Oldinvestor