Slife, re: Nat Gas...
I don't have much of a dog in this hunt, just a few
LEAP puts sold earlier this year.
What I see is profit taking on the "inflation trade"
getting a little ahead of itself, and the underlying
supply:demand fundamentals.
Technically, I like the chart, but would hope for a long
hot summer, and an early winter <vbg>.
The good news: Nattie has broken out of it's down trend.
The bad news: Weak demand and plenty of supply, although I'd
acknowledge the number of rigs shut down, is a when, not if
positive catalyst.
Working Gas in Underground Storage Compared with 5-Year Range
Nat Gas double topped, and now looks to be setting up for a
classic double bottom re-test, and potential breakout above
that $4.57 double top.
Energy demand is still weak, and could get weaker, but I
believe that central banks are going to do yet another round
of stimulus, which should firm commodities against paper.
I still lean to put sales for Nat Gas/UNG and would buy time.
Maybe the $9 - $12 Jan 2010 UNG strikes.
Nat Gas is now forming a base between $3.50 - $4.50, if
we get a re-test of the $3.50 bottom here and it holds,
and if we get any positive draw downs in supply,
then I'd go long UNG, or buy calls.
Bottomline: Supply:Demand ain't pretty, but neither is Central Bank policy.
SOTB |
