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Natural Gas
- Thread starter just21
- Start date
$12.80 stop? thats insane thats $7500 per emin contract. i'd say if it breaks $10 it could run so that would be my stop. with it so hot for so long and the end of winter in sight i can't see ng running much and if it does its a short. i live in the south and i was expecting $500 bills and i jsut got mine the other day it was $220
Quote from 2gtt:
a lot of people are trying to catch a falling knife, and most longer-term systems and traders are still short.
Yes, but they are too short. Once large specs get over 40,000 contracts net short in natural gas, it tends to bottom within about two to three weeks. Further, natural loves to bottom in the first quarter, especially January.
I feel fairly confident in saying we are closer to the bottom than anything else.
Quote from 2gtt:
a lot of people are trying to catch a falling knife, and most longer-term systems and traders are still short.
Technical traders tend to be weak hands, esp in volatile commodities such as ng. Using a large stop is probably a good idea if you're a long-term short.
Any target on the downside? I think it oculd go as low as 6. Not that I hope it does, but I am ready for it.
Quote from 2gtt:
we are two very different traders, and maybe both of us can make $$$ on natty
Edward Kim
2GTT, LLC
Hopefully, man!
For what it's worth, here is an update that I wrote just before open this morning. It looks good right now, although certainly I know it could turn around.
The trade I have in mind would be to have bought just above Friday's high today, at 8.65, with a stop at 7.53.
Attachments
Natural gas is up $0.80 on the day right now. Also, the fact that winter is over has already been priced in. Natural gas often makes its annual low in Jan or Feb (see my update).
As far as inventories, I think they're a non-issue at this point. The big worry in natural gas is always the next winter. Why? Well, we only have so much storage, say, 3500 Bcf. Even if we magically ended this winter absolutely full, we simply wouldn't be able to add any more gas to storage. There would still be worries about whether we could make it through the 2006/2007 season.
It's like starting across the desert with a 10 gallon bucket. It doesn't matter if your starting point is a water fountain, or a water fall, all you have is that bucket to get you across.
As far as inventories, I think they're a non-issue at this point. The big worry in natural gas is always the next winter. Why? Well, we only have so much storage, say, 3500 Bcf. Even if we magically ended this winter absolutely full, we simply wouldn't be able to add any more gas to storage. There would still be worries about whether we could make it through the 2006/2007 season.
It's like starting across the desert with a 10 gallon bucket. It doesn't matter if your starting point is a water fountain, or a water fall, all you have is that bucket to get you across.
Today's storage report put me as dead wrong regarding the timing of the anticipated turnaround.
I am still a bull looking for a price action signal to get me back on board, but for now, I am out.
I am still a bull looking for a price action signal to get me back on board, but for now, I am out.
Long from $14?! Holy cow.
Anyway, I see we have some supports coming in on the continuous chart at 7.14, 6.90, and 6.03. Where are you looking to take profits?
Anyway, I see we have some supports coming in on the continuous chart at 7.14, 6.90, and 6.03. Where are you looking to take profits?