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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: HH who wrote (25339)	12/9/2009 9:19:20 AM
From: Real Man	2 Recommendations Respond to of 71489

Because in a supercontango situation you can make record risk free profits by selling futures, buying Natural gas, and storing it. This was not possible this Fall, because storage was full. Thanks to winter, storage will start to get emptied this month, so storage costs will drop, creating an upside pressure on NG spot. FWIW, NG spot shot over January futures last week, so this dynamics seems to be happening. We essentially ran out of storage this Fall, which is why NG entered supercontango. Contango = storage costs. I'd love to make 30% risk free in 2-3 months. Wouldn't you? In general, the market quickly eliminates such opportunities. At least, in theory it should -g-

To: HH who wrote (25339)	12/9/2009 10:05:18 AM
From: Real Man	Respond to of 71489

FWIW, I am not looking for a huge rally in NG, just some rally for a change. And, I don't really expect UNG to go to 20 this Winter, maybe 12. Once contango is eliminated, UNG will stop pissing cash and start tracking NG again. Now is about the time, but who really knows. As I mentioned before, the additions to storage in all of November, while highly unusual and indicating oversupply, are not necessarily bearish for spot gas or futures. Technically NG needs to take out 5-5.25 range resistance to turn more bullish, and there are quite a few December calls for UNG=10 strike expiring next week, so we will probably stall here, for now, i.e., there is no way UNG gets above 10 and stays there for December options expiration. January options picture is bullish. -g- I just don't think that if something currently has oversupply, it should trade at zero forever. -g-