Discussion in 'Commodity Futures' started by PAPA ROACH, Oct 29, 2008.

  1. Natty has the look and feel of being too short into expiry today. Cash has been very strong last 2 weeks, forecast are trending colder for winter, fomc out during settlement period, possible short/long term bottom in equities, dollar getting trashed, etc etc..

    Trading 6.375 at the moment, Think it is a good R/R for playing long today. ICE also has been running a short offer stack today, much better bid volumetricly.

    Good luck
  2. thanks roach
  3. haven't been watching natty too much lately, but when did 2Q gas in 09 start trading at a premium to 1Q?
  4. End of last week/beginning of this week...H/J trading 3 cents and has been as low as 9 ticks today.
  5. If H/J goes -.10 within the next month, I am loading the boat. All the weather premium has been extracted from the winter as if there will be no winter. With all going on in global macro economy, it is hard to make a fixed price call, but there is certainly some beautiful R/R setups in the spreads.
  6. The "Ameranth Guy" is up to his old tricks again! :eek:
  7. If Brian Hunter was making the same bet on H9/J9 he would be getting crushed...he was long the H/J when he blew up Amaranth. That spread has caused more blow ups than most, crushing Amaranth in 2006 when it dropped, Saracen earlier this year on its way up, and likely others I don't know about (not sure if that is the one that got Mother Rock too). It got down into the 60 cent range at xmas time last year, rallied to 2.30 this past June, and has since fallen to just 3 cents at present.

    Agreed on your spread comments, Papa Roach.
  8. That is what blew up MotherRock. Funny thing is, Amaranth blew up Motherrock (who was short H/J), and as soon as Bo was out, Johnny Arnold at Centaurus blew Brian Hunter out of the solar system.

    All I know is that this a seasonal spread that has well defined storage economics attached to it. If March is trading more than .20 under April, storage holders will roll their inventory forward which creates a tight spot market with necessary withdrawls still. To incintivise withdrawals, spot needs to trade over nearby. So this spread has a pretty good floor price built in.
  9. Interesting to know Mother Rock was another victim of the H/J...which has actually been pretty quiet today.

    The front of the curve was pretty quiet until about 45 mins ago, and we had one of those rallies that natty is know for--35 cents in about 30 mins. Any news anyone is aware of?
  10. not sure, I noticed that too. Yesterday it dropped 20 cents in like 10 minutes too. So who knows?? This is a great thread by the way guys, thanks for the good commentary. Have a good weekend.
    #10     Oct 31, 2008