Can Start Buying Natty Now

Quote from simplyloge:

I think it fills the Sept 06 gap...( cash 4.50 or so )....im short and will reverse there....if i get that fortunate:confused:
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that is the gap caused when the market found amaranth was long to no end.

brave you are being short at these levels in hurricane season.
 
Quote from scriabinop23:

that is the gap caused when the market found amaranth was long to no end.

brave you are being short at these levels in hurricane season.
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trust me.....i watch every tropical depression coming off the African coast.........and your right about amaranth......but have a similar set up in Sept 04.....bottomed around 4.75 or so........but i have been wrong before...:D
 
Quote from simplyloge:

trust me.....i watch every tropical depression coming off the African coast.........and your right about amaranth......but have a similar set up in Sept 04.....bottomed around 4.75 or so........but i have been wrong before...:D
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you could be right. but what i find nuts is the fact that in 04, CL was going for 55 (bottomed in Dec at 40). In 06, I recall it was trading around 60 after coming down from 78 earlier summer peak.

Now I know using the correlation between NG and CL is grasping for straws at best (especially most recently), but CL is making higher highs still. [higher lows remains yet to be seen]

And NG? just crap.. unloved.

oh well.

But consider that funds ALREADY unloaded crude like this:

CFTC: SPECULATORS ON NYMEX CRUDE MARKET REDUCED NET LONG POSITIONS 50% IN THE WEEK TO AUG 21 - WIRE HEADLINE
- CFTC: in the week to Aug 21, international money market speculators move to a net long Yen position for the first time since June of 2006<USD/JPY EUR/JPY USO>


I have a feeling crude is going to have higher lows this winter. So lets say I'm right, we should be near the bottom on NG.

who knows... right?
 
NG just showed up in one of my screens. 2 year low and a $1.70 drop in 5 trading days. geesh, from an oversold perspective, it sure does seem due for a bounce. had my finger on my mouse as the close was ticking down but didn't have the guts to pull the trigger (i trade the HSI, ER2, etc, and have traded CL, but haven't ventured into NG to date).

i take it the only leveraged plays are NG or QG- yes? ie: no options available (i'd rather have a predefined risk given the multiplier)? i know i can't find any thru IB; that doesn't definitively mean they don't exist though. only other options i have found is options on UNG. am i correct?

hard to believe that there won't at least be the whiff or a hurricane threatening the gulf for the rest of the season; and just as hard to believe that that whiff wouldn't cause NG to move substantially above current levels. are the fundamentals really this bad? IOW, what am i missing?

if i do take a position, i was thinking of the october contract. comments on that vs the sept. would be welcome...
 
Quote from gangof4:

NG just showed up in one of my screens. 2 year low and a $1.70 drop in 5 trading days. geesh, from an oversold perspective, it sure does seem due for a bounce. had my finger on my mouse as the close was ticking down but didn't have the guts to pull the trigger (i trade the HSI, ER2, etc, and have traded CL, but haven't ventured into NG to date).

i take it the only leveraged plays are NG or QG- yes? ie: no options available (i'd rather have a predefined risk given the multiplier)? i know i can't find any thru IB; that doesn't definitively mean they don't exist though. only other options i have found is options on UNG. am i correct?

hard to believe that there won't at least be the whiff or a hurricane threatening the gulf for the rest of the season; and just as hard to believe that that whiff wouldn't cause NG to move substantially above current levels. are the fundamentals really this bad? IOW, what am i missing?

if i do take a position, i was thinking of the october contract. comments on that vs the sept. would be welcome...
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UNG options will do what you want.

basically, storage will be similar to last yr = full. so fundamentals will be the same. who knows if the shorts are gunning for the 4.xx target.

another interesting trade for you might be the X/V spread. go long oct short nov.. currently trading around +95c. The idea here is that a hurricane/etc will drive more premium into Oct and bring it closer to Nov. In a real supply crunch, front months go at premium to rear (ie look at peak winter prices on NG trading to premium of spring 08. same concept)

This spread blew up to 2.00 last yr with amaranth's distortions factored in.

Previous yrs (before last 2) usually close nov to a .35c premium at most.
 
Quote from scriabinop23:

UNG options will do what you want.

basically, storage will be similar to last yr = full. so fundamentals will be the same. who knows if the shorts are gunning for the 4.xx target.

another interesting trade for you might be the X/V spread. go long oct short nov.. currently trading around +95c. The idea here is that a hurricane/etc will drive more premium into Oct and bring it closer to Nov. In a real supply crunch, front months go at premium to rear (ie look at peak winter prices on NG trading to premium of spring 08. same concept)

This spread blew up to 2.00 last yr with amaranth's distortions factored in.

Previous yrs (before last 2) usually close nov to a .35c premium at most.
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thanks for the reply.

that gets to the crux of my question on fundamentals- last year we had no hurricanes, storage full, AND amaranth- and it still only bottomed around $7. granted, there was still more of a katrina-memory premium built in last year (i'm guessing); but this bottoming also didn't take place in august! begs the question:

is the price action factoring in economic weakness, possibly recession? what's everyone's longer term downside target for NG if we end up in recession (assuming no hurricane impact)? would that put NG back in the $3-4 range, or are those days gone?
 
Quote from scriabinop23:

you could be right. but what i find nuts is the fact that in 04, CL was going for 55 (bottomed in Dec at 40). In 06, I recall it was trading around 60 after coming down from 78 earlier summer peak.

Now I know using the correlation between NG and CL is grasping for straws at best (especially most recently), but CL is making higher highs still. [higher lows remains yet to be seen]

And NG? just crap.. unloved.

oh well.

But consider that funds ALREADY unloaded crude like this:

CFTC: SPECULATORS ON NYMEX CRUDE MARKET REDUCED NET LONG POSITIONS 50% IN THE WEEK TO AUG 21 - WIRE HEADLINE
- CFTC: in the week to Aug 21, international money market speculators move to a net long Yen position for the first time since June of 2006<USD/JPY EUR/JPY USO>


I have a feeling crude is going to have higher lows this winter. So lets say I'm right, we should be near the bottom on NG.

who knows... right?
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Actually i think your analysis is right on. When i look at the seasonal chart it looks like my short position has perhaps a week left in it. With the recent downward pressure ( monday they traded record volume ) im hoping to see a level realistically in the 4.75-5.0 area. In any case my intention is to reverse and get long within the first week or so of Sept. based on the seasonal no matter where the price is. I have to agree with you that ng is probably very close to a bottom. Im just trying to work this trade for everything i can before reversing.
 
Interesting how they dropped it a almost a dime after the pit close Fri on almost no volume. Disappointed small spec punters?

I'm looking for a bottom soon, this may not be it, but it's close I reckon.. Also like that V/X spread to narrow.

Playing a bounce off this very negative week from Friday's close, but not risking much. I may just leg into V/X spread before I give up on it. (v/x gas attack)

But I guess it just depends on where the funds are taking it, and that may well be much lower. There will be no weddings.
 
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