Correct, I bot N/sold Z. I took profit this morning on the V/X at .697, it may come back in a bit, once again giving opportunity to wear it again.
I closed out at 1.771 for a .033 profit. I am rethinking my bullish early month/bearish last part now with this action today, it just doesn't look good for the bulls. I am flattening out and will re-assess next week.
Interesting action I suppose, looks like the market wants it to go down with the sell off late in day, but I think CL at 70 soon and July being a bottoming month for NG- I think we will see 4+00 remander of summer, nobody really likes to sell the p@$ out of it( speaking of large funs in Houston in my opinion, you know who) going into hurricanes and all the uncertainty with CL and dollar. If your a bear- spreads are only way to play, flat price will drive you crazy from short angle- it might go lower, but it will rally 30+ cents first ! long
You may be right, but the action I saw on ICE Friday made me close out of my bull spreads. It looked to me like fund accumulation of shorts, whacking the bid in waves. Enough to drive the price down even with the huge UNG volumes getting pumped. This makes me rethink as when I usually see this action, it is very indicative of a larger move down immenently. As far as oil prices are concerned, I would loosely follow that at this point, there is no available fuel switching, gas is and has been cheaper for some time; all switching has taken place a long time back. Also to note is nuke refueling is over and we are quickly ramping back up, offsetting gas fired demand. Nukes are up like 10% in the last week and a half. Also, LNG volumes picked up last week, we had been down some due to a few issues (not price related). I will watch the ICE action again tomorrow before I decide whether to put on bear spreads, if it is similiar to Friday, we're going down.
I agree on everything you point out- I think its simple inflation. Nat Gas and CL should not be here except for the dollar story..... demand is way off YR/YR too
Layering in to -V/+X here (.635). I have watched ICE action once again, showing someone accumulating a large short position on the stealth, similiar to Friday, just less volume and agression. Also the UNG volume on the day thusfar is quite muted up here. I now lean to the downside and like accumulating bear spreads. Will rethink if we close out strong (over the 4.12-4.15 area today).
Just to be sure I know what you're talking about: -v/+x means you're selling October (4.629) and buying November (5.254)? You're .625/MMBTu (or $6250) out of pocket for every pair of contracts you have on. So you're anticipating that the v/x spread will widen as we get closer??? Otherwise it's a loser... I'm just using the prices from the Nymex page.
I can't speak totally for Roach, but yes he is bearspread so he is anticipating the contango strengthening. He isn't out $6250 a spread though, that is just the difference.