Replies to post #1842 on ETFs, Leveraged ETFs, Sector Funds

[No-Quarter]

QTUM up 12% this morning ;)

Here is today's NatGas report.

GLTY

http://celsiusenergy.co/p/daily-commentary.html

Natural Gas Plunges On Bevy Of Bearish Catalysts; Bearish Investor Holdings Outnumber Bullish Holdings By The Most Since June 2020—When Natural Gas Was $1.75/MMBTU; Gas Demand To Rise Today As Much Colder Temperatures Sweet East In Short-Lived Cold Snap; Inventories May Peak For The Season Today

6:00 AM EDT, Monday, November 1, 2021
Natural gas prices tumbled to wrap up the week on Friday with the Front-Month December 2021 contract slumping 36 cents or 6.2% to settle at $5.43/MMBTU. Nonetheless, on the week, the commodity stilled gained +2.8%, snapping a three-week losing streak, thanks to the combination of a huge Monday gap up and the expiration of the November contract in a state of Contango to the new front-month.

TTF Price History

Figure 1: Click here for more information on on global LNG price spreads.

Friday’s sell-off was likely multi-factorial. First, as it appears that Russia will be imminently increasing pipeline volumes to Europe, prices have plunged, with both the TTF and NBP price points falling more than 10% last week. Secondly, as a cold snap prepares to boost natural gas demand across the Lower 48, the near-term computer models are already indicating that this pattern change will be short-lived with seasonal to warmer-than-normal temperatures likely by mid-November. And lastly, while underperforming expectations, natural gas production has recovered, reaching new pandemic highs above 94 BCF/day on Saturday which, coupled with stronger imports from Canada, has pushed natural gas supply up more than +4 BCF/day year-over-year.

These trends all continued over the weekend. European prices tanked once again with TTF and NBP both falling more than 15% to $22.03/MMBTU and $22.76/MMBTU, respectively, each down more than 40% from their early October peaks. While US prices are not directly tied to Europe’s and LNG profitability spreads are still quite favorable, if Europe dragged prices higher in October, I would not be surprised to see them drive prices lower in November.

14-Day Accumulated GWDDs: ECMWF Vs GFS Computer Model Trends

Figure 2: Click here for more information on on the temperature forecast

Meanwhile, the near-term computer models continued to trend milder over the weekend with especially the 12Z run of the ECMWF trending considerably warmer for the November 5-12 period. As a result, as of Sunday evening, my Consensus Model—which integrates a performance-based average of GFS OP, GFS ENS, and ECWMF ENS data—was calling for 235 GWDDs for November 1-14, the second fewest for the period in the last 5 years, ahead only of 2016’s dreadful 165 GWDDs. This could extend the injection season with my projected draw for November 6-12 getting trimmed to just -2 BCF and, if this trend continues, I would not be surprised to see it flip back to a small build.

For all of these reasons, I continue to feel that, near-term, downside risk outweighs upside potential for natural gas, even if the commodity may see an oversold bounce to start the week. I am maintaining an aggressively bearish downside price target of $4.25/MMBTU for natural gas, which approximates the commodity converging towards its March-June 2022 pricing.

CFTC-Reported Money Manager Long & Short Holdings

Figure 3: Click here for more information on on natural gas investing.

Meanwhile, on Friday, the Commodities Futures & Trading Commission (CFTC) released its weekly report detailing natural gas money manager holdings through Tuesday, October 26. As has been the case all year, natural gas traders have been considerably more pessimistic than lofty prices would suggest. On the week, open long positions fell by -5,534 contracts to 210,936 contracts, pushing the year-over-year decline in bullish holdings to 210,936 contracts. On the other hand, short positions climbed by 3,981 contracts to 215,849 contracts, pushing bearish holdings to a +88,119 gain versus 2020—despite gas prices that are up +61% year-over-year. Moreover, the Bullish Sentiment—the percentage of open positions held long—fell to just 49%, down -17% versus 2020. It is the first time that money manager shorts have outweighed longs since April 6, 2021 and the weakest since June 30, 2020—a time when natural gas was trading at $1.75/MMBTU. Overall, bearish money manager sentiment will continue to place downward pressure on natural gas. However, as short holdings rise, the chances of a short squeeze increase should we actually see some significant cold this Winter. Click HERE for more on the latest money manager holdings.

Today’s Forecast Departure From Normal Highs Temperatures

Figure 4: Click here for more information on on the near-term forecast.

Over the weekend, natural gas demand rose slightly as colder temperatures overspread the northern Plains. After a +9 BCF/day injection on Friday, I projected +7 BCF/day and +6 BCF/day builds on Saturday and Sunday, respectively, both still slightly bullish versus the 5-year average +4 BCF/day. Gas demand will jump further today as much cooler temperatures finally arrive across the Heartland and Great Lakes. The largest anomalies will be centered over the Central Plains with Topeka, KS and Omaha, NE only reaching the lower 40s while Kansas City, MO may be lucky to clear 40F, each 15F-20F colder-than-normal. Below-average readings will extend as far west as Denver, CO which will only reach the lower 40s, and as far East as Indianapolis, IN in the lower 50s, each 5F-15F cooler-than-normal. Warmer-than-normal temperatures will be largely restricted to Texas, where Dallas will reach the upper 70s, the Southeast, where Raleigh, NC could near 70F, and the Intermountain West, where Boise, ID will top out in the lower 60s, each around 5F warmer-than-normal. Overall, today’s forecast mean population-weighted nationwide temperature will tumble by -2.7F from Sunday to 55.0F, -0.6F cooler-than-normal. Total Degree Days (TDDs) will rise to 11.1 TDDs, the 13th most for November 1 in the last 40 years since 1981. Click HERE for more on today’s temperature and degree day outlook.

Projected Realtime Natural Gas Inventories

Figure 5: Click here for more information on natural gas inventories.

Based on this forecast and early-cycle pipeline data, I am projecting a +3 BCF/day daily natural gas storage injection, nearly 4 BCF smaller than yesterday’s build and 0.5 BCF/day bullish versus the 5-year average. Over the weekend, natural gas inventories climbed over 3600 BCF while the storage deficit versus the 5-year average fell under -100 BCF. By tonight, projected Realtime inventories will inch higher to 3624 BCF, which could be very close to the seasonal peak with daily withdrawals set to begin, at least temporarily, on Tuesday. The storage deficit versus the 5-year average will widen slightly—a rarity this Fall—to -99 BCF. The year-over-year deficit, on the other hand, will continue to contract, falling by 2 BCF to -297 BCF.

Click HERE for more on today’s projected injection and Realtime inventories.

[No-Quarter]

I have noticed the Keltner channel for ICX is very tall compared to the candle sticks and ribbon. This is caused by wild candle stick swings up and down. This particular coin appears to be way too erratic for me to trade using my charts/matrix. Less a horse to trail ride and more a rodeo bucking bronco.

https://tradingstrategyguides.com/keltner-trading-strategy/

I will likely avoid this one this week.

GLTY