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Once again ugaz pumped up this morning. I'm thinking of doing a statistical study to quantify the morning pump.
Thanks Clay!
Weather looking promising, but it doesn't look compelling enough to buy and hold this over the weekend.
Thanks CT! We must've been extra good for you to visit us today.
Anyone know where Kamakiri went?
NG this winter reminds me a bit of winter 2015-2016. Both have big production surpluses. 2015 had mild weather though. RSI dropped below 15 in Dec 2015 and went below 28 in March. Just an indication of how bad it can get. UGAZ got hammered, dropping almost 90% of its value from its sept 2015 high to March 2016 low.
Do you think the big guys are writing off winter and looking ahead to the impending glut?
Amen to that. I can't tell you how many time I've found myself scratching my head because natty popped for no apparent reason.
Lol! Thanks for that.
I'm a big fat liar. I was waiting to see if the mid January forecast had any really cold weather in it but I couldn't resist the opening dump. i put my toe in the water for 1700 shares.
Once again pumped up premarket
R59 You hit the nail on the head about too much production. Overproduction is due to several factors:
1 oil drillers don't care about the price of gas. They would flare off associated gas if it wasn't illegal.
2. Bigger gas producers have hedged over 70% of their H1 2018 production. They're gonna drill anyway.
3. Cash strapped gas EPs have to service their debt, so marginally profitable wells still make the company some cash. I read recently that Range Resources stated their break even was $2 bcf. So if gas is $2.60 they are still making money on each hole.
4. Lease covenants require a certain number of wells drilled per year or the lease becomes void, especially in Appalachia. You don't wanna lose your lease.
5. EPs look at the same seasonal predictions as us. Late this past summer it was considered a lock that gas would hit $3.40. If your break even is in the low $2s it's a no brainer to keep drilling.
T55 I have to disagree that there is so much cheaper gas in the world. There is no place with gas as cheap as North America. NG is not within $2 of the HH price anywhere else in the world. North American companies simply can't get enough gas to where they can realize more profit. Infrastructure, when it comes, will be a boon to those companies with deep enough pockets to weather the oversupply and big trouble for Qatar and Russia who are currently getting fat selling NG for $5.
There is a chance. I'd give it 2:1 odds.
I look at a lot of weather data but when it comes to winter this site is the best:
http://www.aer.com/science-research/climate-weather/arctic-oscillation
I agree on shorting NG. I've made way more money on dgaz than ugaz. It is hard to ignore that 30ish RSI though.
Big money NG traders use commodity weather forecasting services that look out about 3 weeks. There is no sustained cold weather in in their forecasts YET. As I've mentioned way too often the best chance for cold weather in a winter like this is mid January thru February. I have not been in ugaz recently and will start looking to enter late this week and early next week.
Love the new board!
China's nat gas supply shortfall is interesting but it doesn't affect US prices at all.
HFI Research agrees with you.
https://seekingalpha.com/article/4130430-mother-nature-pummeling-natural-gas-bulls
What kills me is that I did the same as you. I was up so much. Did I take the money? No! I was greedy and it slapped me in the face.
After this current cold snap ends there is no cold weather on the horizon. Couple that with ever increasing production results a big bear market.
Next chance for a turn in the weather should come after Christmas. The January flip could be significant and long in duration. As I've mentioned several times previously the potential for cold weather that accompanies a weak la nina winter usually happens mid January into February.
I am all cash and will start sniffing around for a starter position by Dec 15ish. Until then I think NG goes lower.
I day traded D today and made a few hundred; a pittance compared to the thousands I lost during this last mess.
Sold 7.66s at 6.83 Ouch! I think NG goes much lower.
U could go to 5s. Conditions that could lead to a 4-6 week period of much colder weather are still in place. As I posted before the most common expression of cold air trapping atmospheric blocking happens in late winter - mid January thru February. The problem for NG longs is that there is no cold weather forecast after Dec 20th. It has only taken 6 trading days for NG drop 35 cents to this morning's 2.85 It will be two weeks before hints of cold weather show up in the January forecast. NG could drop to 2.60s by Christmas.
50% in avg 7.66
Its all about the weather.
Traders really want to push NG to $3 or below. Don't be surprised to see ugaz mid 7s in the next couple of days. I'm all cash now... waiting.
I'm still bullish NG.
The prospects for cold weather this winter are not dead. Several factors that can bring a 4-6 week colder than normal period are still in play. This cold weather period is likely to occur later in the withdrawal season rather than earlier. Think January and February.
Here is a link to the AER winter forecast by MIT professor Judah Cohen. He is one of the best in my opinion, however he totally blew last winter's forecast.
http://www.aer.com/science-research/climate-weather/arctic-oscillation
I think there’s a 50/50 chance that the January contract premium gets annihilated once the Dec contract expires. Just like what happened at the last expiry. That is reason enough to wait and see. Of course a cold weather forecast changes everything.
Welcome from the uco board TMM. I hope you made too much money on wti today!
NG production has been growing fast, setting new production records almost weekly.
Winter looks to be normal for the east and above normal for the west. So far it has been surprisingly cool in the east, enough that withdrawals from storage have started.
Storage is running below 5 year average.
LNG shipments and exports to Mexico are taking about 25 bcf per week. These two outlets for NG did not exist 3 years ago.
Technical support looks pretty strong at 3.05/3.06, though it would be beneficial to close the gap to 3.00. Also pretty strong resistance at 3.22
Biggest unknown that is driving the market is weather. The market has been flopping around like a fish out of water waiting for a weather forecast to give the market direction. ECMWF is the most trusted forecast.
My opinion is there is a bullish sentiment and traders are waiting for that cold weather forecast. I don't think its time for a big rally yet, but a chance to make $ on the pops and buy the dips. Today's close of 3.13 is not a good entry in my opinion. Then again what do I know?
If numbers come in as projected I expect NG to drop and perhaps close the gap. If there is a surprise draw I would assume a rise in NG but not huge. More supportive than breakout. My 2 cents.
Weather forecasts trump everything.
25% in 10.79
Back of the envelope calculation shows ugaz goes up about 10 cents per penny of the January contract. NGF18 is at 3.31. That's approx 70 cents to $4, giving ugaz a price of 18.40.
If ngf goes to 4.30, ugaz goes to 21.40. Beta decay will occur knocking the actual price of ugaz down somewhat. Beta decay is hard to quantify because it is not constant. I'm not even gonna try.
Bottom line is it could happen, but it would take some extraordinarily cold weather - long periods of the high latitude blocking I posted about a few days ago. The current La Niña pattern is only slightly conducive to that happening.
I am bullish on NG and want to get back into ugaz. Usually patience pays off, but sometimes the rally passes me by.
Heading into the weekend all cash and no worries.
Sold all the d on that spike. Sure would like a better entry on u. Maybe I’ll try to scalp d again if it spikes lower. I feel like a teenager. I don’t know what to do!
Good morning all. If ugaz closes up today it will be 7 straight days of gains. That would be the third longest winning streak in the existence of this etn. It's rare to have 6 straight days of green - that's only happened a couple of times. Profit taking anyone? I loaded D pretty heavy yesterday afternoon.
That 600,000 buy speaks volumes. Big traders (in NG and UGAZ) are always forward looking. They have a good handle on whats going on with production, weather and storage further out than my puny resources.
The question about today's report is if it'll come in with a bullish surprise. If it is +9bcf instead of +14 that means future expected cold weather will eat up more supply than projected - and NG is off to the races.
Nice work.
I ended up scalping D for a quick $400. I’m waiting/hoping for a U entry point tomorrow morning.
Forget the fade. There's too much power in NG.
NG Is bumping up to resistance at 3.18. I think I might scalp D. I did yesterday and it worked out.
Sold 2/3 at 10.64