Wow, out of the blue on a nice up day came a one-two punch to natural gas that drove it down to $4.68. Any thoughts as to why the sudden change in sentiment today? This was around $5.50 a week or so ago...
Wouldn't call it "sudden change of sentiment"... since the one-year high on Jan 7 we are going down... factors for the sell off on Monday was another slightly better weather forecast it seems. Also fast money is short and adding if anything. And it's not looking that bullish going forward... from Bloomberg: "The number of gas drilling rigs operating in the U.S. climbed to 905 last week, a 36 percent jump from a seven-year low reached in July, according to data from Baker Hughes Inc. âThere is now no supporting weather under this market,â Rose said. âThe market, left to its own, is headed for lower prices with the rig count.â
I know it seems late to be bearspreading, but just sold our first unit ngk10-ngv10 at -39. Last fall, spring/fall premiums were $1+ wide at 2.40,3.40 Using Oct versus Nov or Dec will protect a bit from an erosion in winter premium. First target, septembers lows at -55 and I'll give it til May exp. but will be happy to roll into June on that leg if need be. K/M is only -.07 now which I also think could widen. I will cut losses if we breach -30 on a closing basis.
Therein lies the problem with ET I guess. We'll just never have enough threads about daytrading ES though...
I like the spread idea... but maybe would wait for a -36 to get in as I see the target at -50 and stop at -30. But of course... we might never see -36 again! Btw, how much margin do you need to post for NG spreads. I have never put them on with my current broker (IB).
I know I enjoy this thread. Pretty much anything ag or energy futures I'm interested in. Back when the theory of natty to crude ratio was the topic of discussion I was on here when someone explained that there were logical reasons why natty was and would continue to go down, which it did. I don't remember who, but somebody on here nailed it. I believe that may have been PapaR. That was soon followed by an awesome call on going short corn. Dude was within 2cents of the top and 2 cents on the bottom of a 75cent move. I don't recall the poster on that one. It was incredible. Keep posting please; it's being read. That what this awesome site is for.
Maybe we should continue the discussion here in the other Natural Gas thread: www.elitetrader.com/vb/showthread.php?s=&threadid=192205 It's not like the other one is overcrowded...