the best way to put it is that i'm trying to envelope a bottom. I resolved a long time ago that there is no way i can get in on bottoms and get out at tops - catching th wave and riding the trend is the best i can do.
there are a lot of power plants in the south and west that use ng..... my understanding is that the plants are exclusively ng, so in that fact you are right, the plants don't compete and use the cheaper commodity.
November eNatural Gas - Down to Challenge 5.7760 (which is a Divergent Extreme Support and this specific chart increments first attempt to break it's Bull Trend). This is the call I made on Friday. Since we breached 5.7760 this morning we will continue to go down until an oscillation of price is created where price fails to make a LL. We are potentially setting up the creation of a 3X Divergent indicator Support. If this indicator support oscillation, being created now, does not breach the level of the previous indicator support oscillation. Simply put . . . this market is in free fall and potentially close to a bottom.
I find it amusing that everyone is suddenly calling for 35$ oil (forbes). The market was getting used to 65$ oil as being cheap. Does anyone else think that the path has been blazed - the shock been felt - 70$ is no longer shocking? It may be expensive, it may be a historic high, but the market is no longer appalled by oil at this price... looking at the charts - my opinion is the past of least resistence is up, not down..... i was also wondering if there is anyone out there that was watching or trading oil during the 70s and 80s, and the 'sentiment' of the market during that time, just before and just after. My mini-rant is in response to oil failing to make a meaningful move below 60$. I just wanted my comment recorded for posterity.
krazykarl, That is scary comment. I say it all of the time. With price making a Lower Low how can the "Path of Least Resistance" be Up? That makes no sense at all. I trade Emini Crude. Simpler I guess and we are bouncing this morning off a new low @ 59.525. Right now and intraday we are going up but at some point we MUST fall back to re-test 59.525 to confirm that price as "THE", either long term or short term bottom. Price can only go up or down and THAT is the "Path of Least Resistance". Natural Gas, Heating Oil, Unleaded Gas, Crude Oil and Propane are not co-joined markets. Sometime they move in unison sometimes they don't. They each have to be managed as individual entities. The chart I posted earlier has since negated the divergence effect and is now simply going down. There isn't even any help now to the upside from divergence. In January of this year eNatural Gas had visible Support levels at 6.225, 5.730, 4.560 & 4.425. No one figured it would drop that much but it did. The Oct. contract has already breached all of those levels and is now heading toward 3.770. We haven't seen these levels since December 2002 so what is pushing it. Who cares? It will drop till it fails to make a price oscillation LL.
From MarketWatch.com "A 'bleak outlook' for natural gas As for natural gas, Credit Suisse analyst Tobias Merath said he expects prices to remain volatile as investors move to trim positions in wake of massive losses incurred in energy trading by hedge fund Amaranth Advisors. "We expect volatility to remain exceptionally high," he said. October natural-gas futures closed lower by 15.2 cents at $4.475 per million British thermal units, following an early low of $4.42 -- a intraday level last seen in late October 2003. "Gas-market fundamentals are looking increasingly bleak over the next couple months as a confluence of events suggest the market will remain oversupplied in the near term," said John Gerdes, analyst at SunTrust Robinson Humphrey/Gerdes Group Energy Research, in a note to clients. "While not officially over, some forecasters are stating that the hurricane season is practically finished, leaving [Gulf of Mexico] producers unscathed," he said. "
Hey, it's going to bounce somewhere. Just hope you don't run out of money by then and certainly hope your trades go well. Not trading this myself.