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A case study that supports the idea of shorting NG via DGAZ.
05/20/2015 the front month contract - NGN15 (July15) - open at 3.005
DGAZ opened at 25.00 100% in July contract
UGAZ opened at 3625.00 100% in July contract
10/01/2018 the front month contract – NGX18 (Nov 18) – open at 3.007
DGAZ opened at 17.69 100% in the NOV contract
UGAZ opened at 74.43 100% in the NOV contract
Natural gas was essentially priced the same opening those two dates, however during the 3 1/2 years between those two dates:
DGAZ decreased in value 29.2%
UGAZ decreased in value 97.9%
Contango is your friend when you trade DGAZ
A case study that supports the idea of shorting NG via DGAZ.
05/20/2015 the front month contract - NGN15 (July15) - open at 3.005
DGAZ opened at 25.00 100% in July contract
UGAZ opened at 3625.00 100% in July contract
10/01/2018 the front month contract – NGX18 (Nov 18) – open at 3.007
DGAZ opened at 17.69 100% in the NOV contract
UGAZ opened at 74.43 100% in the NOV contract
Natural gas was essentially priced the same opening those two dates, however during the 3 1/2 years between those two dates:
DGAZ decreased in value 29.2%
UGAZ decreased in value 97.9%
Contango is your friend when you trade DGAZ
I think you’re right, but it could go to 3.18. I bought 1500 at 13.35 premarket
In dgaz at 14.45. Looking to add tomorrow at 13.80 or lower.
Time to buy dgaz. Any price below 14 should put you in the money. I will assess in the morning but would like to buy at 13.80 Fear has hold of the market. The upcoming cold shot will be followed by rally killing warmer weather.
Another dgaz swing trade for 6% this morning. Its easier for me to trade when ng is in a range. I believe the market is ultimately oversupplied so i am buying dgaz when it gets to the top of its range.
ANother opportunity to short natural gas this morning. I bought D before the report at 20.94. I was hoping to pick up more on a sharp dip lower. I sold soon after the report at 21.64. It looks like ng is gonna be range bound like so many other summers. That means opportunities await.
Bought dgaz 20.79. Sold 23.01
Took my own advice and bought dgaz at premarket open. No ugaz was available to short. Cooler weather forecast drove futures down as i expected. Hopefully they will drop to 2.92 where i plan to sell D at approx $23
This is a good spot to short ugaz, even more so if NG touches 3.05 on monday.
Sold dwt for a small ggain. I wanted 10% but i take what mr market gives me. Crude is going up.
Gold should jump monday and miners have already outstripped gold in this last syria run up. Perhaps goes to 1370 but it wont last. If it gaps significantly i will be on watch to short miners
Picked up u last friday late for 26.26. I did well this week. I believe an opportunity is in dwt. I bought today at 8.88. I believe it is a buy below 9. IMO the jump in price is a little over done. I look for oil to dip to 66 at the least
WTF!? Article in Forbes quotes BNEF as saying NG break even in Permian is -2.36. Here's a link
https://www.forbes.com/sites/judeclemente/2018/03/06/cove-point-becomes-2nd-u-s-liquefied-natural-gas-export-terminal/2/#170bae3c6170
Cohn quitting is a blessing for UVXY.
EIA report somewhat bearish. Whipsaw at the report but the crude price trend is down. Longs are getting nervous. Picked up 3500 D monday PM. Looking good so far.
Picked up slug of DWT 10.58 Monday PM.
Also picked up JNUG today at close cheap. I will flip JNUG tomorrow morning. I see at least a dead cat bounce it it.
I haven't been around much lately. Hope everyone is trading profitably!
Oil showing chink in it's armor? API shows build of crude 4.7 mm bbl and gasoline 4.1 mm bbl. EIA report agrees with API 70% of the time. I am all cash. I could be a bear tomorrow. Sentiment is at record bull level. Long squeeze possible by the weekend?
March is now over 40 cents backwarded to the front month. I have never seen such a large difference.
Thank you oil! UWT being very nice to me.
As of this evening Mar contract is over 27¢ backwarded. If this holds UGAZ could be a sweet play at expiry (1/29). La Nina winters tend to be late and cold.
I don't stop by often cause I have a business to run. It gets in the way of my trading life! LOL!
Mar contract now up to 24¢ backwarded. I think there is better than equal chance that more bouts of cold air will hit near or shortly after expiry driving the Mar price up. I will be looking at taking a long position or shorting DGAZ (if i can find the shares)
Expiry is 10 days away. Thats a long time in NG.
U currently tracking Mar contract.
Yesterday's close 2.985.
Today's close 2.939
Difference .046
Divided by yesterdays close is .01541
Multiplied by 3 (geared ratio for UGAZ)=.04623 or 4.6% decrease in value. I don't know why it shows 4.91% decrease on my ticker but it is in the ballpark.
Hope this helps
Nice week for sure. Lots of scalps, flips, small ball stuff. Going into the weekend all cash.
I have to agree with you on oil. It's getting love from somebody. I know you're not a fundamentals guy but there has been nothing to indicate that inventory draws will stop. There are so many externals, Venezuela, Nigeria chaos, Chinese demand, blah blah etc that point to higher prices in the near term. Eventually price will have an effect on demand, but for now looks up. Yesterday I was so bearish.
Hot damn! Let's ride it down!
Oil floating like a dead fish. Pretty good report and cant make its mind which way to go. I vote DOWN! Still waiting. Patience....
JNUG was awful good to me. I scalped it multiple times for nice gains. Missed out on JDST today though. Nice to see some volatility in gold.
I flipped DGAZ premarket for 3% gain. I am satisfied with that.
Its all about the weather for the next 3-4 weeks. The pattern established over the eastern US of longer cold spells interspersed with shorter warm ups will likely continue. My opinion is now slightly bullish NG.
Short has to consider significant backwardization into the MAR contract. That discount could evaporate once MAR becomes the front month.
That is what happened twice to traders holding UGAZ this fall when the premium on the front month evaporated after expiry making ugaz worth considerably less.
I picked up some DGAZ at close today which I plan to sell tomorrow or Friday. I rarely hold over two days, but on a couple of occasions I have held two weeks. I've been trading U and D for over three years.
JNUG showing me lotsa love mainly due to weak dollar. Currency traders are referring to the dollar in this last downturn as the sh*thole dollar LOL! Keep up the instability. Government shutdodwn looming spells good news for goldminers!
Thanks bud. I will be all cash by the end of the day. Keeping my eye on oil next week.
jnug is rockin it!
Time go go long gold? I made a few percent when gold stalled early this week, but I think it resumes upwards a bit before the end of its cycle. I'll be lookin at jnug in the morning.
CNN post featuring Judah Cohen, one of the weather heads I follow closely.
http://www.cnn.com/videos/tv/2018/01/10/exp-gps-0107-witw-climate-change.cnn
sold DGAZ. Good thing too, Ng on a roll!
I think the bearish sentiment is driven mainly by oil price. Oil producers are probably tearing into ducs as their current wells decline. The problem for gas is that Permian wells are especially gassy at the end of their lives. Law prevents most of this gas from being flared. It has to go into storage. Oil drillers don't care about gas price.
Wow! That is huge. That said, I did pick up some D on the report.
Bought more D avg 25.16
Bought DGAZ 25.61 Might buy more on possible dip if report exceeds expectations.
Not buying. Chart may be in a bit of consolidation. NG should be a bit higher for me to buy DGAZ or a bit lower for me to buy UGAZ. I think overall sentiment is slightly bearish, but we are looking at monster draw coming up tomorrow and significant backwardation. I definitely need a clearer signal in order to buy either.