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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: Jack of All Trades who wrote (1949)	4/1/2010 11:22:23 AM
From: ggersh	Read Replies (1) \| Respond to of 221139

As long as I can profit from it. I sure as heck don't know the fundamentals in the NG market! What's your 3.60 area of support based on? TIA

To: Jack of All Trades who wrote (1949)	5/9/2010 8:02:05 PM
From: fred woodall	Read Replies (1) \| Respond to of 221139

Big fluctuations in natural-gas futures prices have lately been few and far between, but traders aren't ready to give up on the often-volatile market. Advances in drilling technology have released a bounty of natural gas embedded deep underground, in rock formations known as shales. Company and U.S. government officials have touted shale gas, asserting that the new supplies can stabilize prices and meet the nation's energy needs for years to come. Although the glut of shale gas has limited price swings, the existence of these newly discovered and promising gas supplies isn't likely to limit price moves enough to drive hedge funds, banks and other speculative traders out of the gas futures market. Swings of 4% or more in a single trading session will still happen as weather forecasts, energy-policy initiatives and week-to-week changes in drilling activity make waves. "This quiet cycle in natural gas is not going to last forever," said Henry Weitzner, head of U.S. natural gas and power trading for Barclays Capital in New York. "I don't think we've entered a new paradigm." Although the gas market has been choppy over the past several weeks, gas futures have been trapped in a narrow price range, typically staying within 20 cents of the key level of $4 a million British thermal units. When the Dow Jones Industrial Average plummeted nearly 1,000 points Thursday, sending most commodity markets tumbling, natural-gas futures barely budged. The gas market's relative calm is a far cry from the 1990s and early 2000s, when concerns about dwindling supplies often drove double-digit percentage moves in gas futures. On Feb. 24, 2003, gas futures on the New York Mercantile Exchange soared nearly 40% on frigid weather and low inventories, from $6.606/MMBtu to $9.137/MMBtu. Front-month Nymex natural-gas futures on Friday rose 2.2% to $4.015/MMBtu. Geographic isolation, in addition to shale gas, has contributed to the gas market's recent placidity. World events are often of little importance to gas traders, who are more concerned with issues that affect the U.S. gas market directly, such as North American weather patterns and U.S. gas inventory levels. Relatively steady gas demand has also bolstered the stability of that market. Because natural gas generally isn't used as a transportation fuel in the U.S., most of the gas consumed in the U.S. is used in the electric-power sector and to heat homes and businesses. Although gas demand can fluctuate with the strength of the U.S. economy and the price of coal, a competing fuel in the power industry, dramatic swings in U.S. gas consumption are unlikely without major policy changes to spark greater use of fuel in vehicles. But the domestic nature of the gas market also makes it less liquid than much larger, globally traded commodities such as crude oil and gold, which means gas futures should remain volatile enough to attract financial traders. A hurricane in the Gulf of Mexico, which remains a major source of gas production despite growing shale-gas output, could spark a double-digit percentage rally in gas futures, for example. "The gas market is a thin market," said Phil Flynn, an analyst with PFG Best, a Chicago brokerage. "Speculators can move that market more than, say, oil, which is much more heavily traded on a global scale." Looking for entry (first installment) Monday.