If we get a bounce in Natty gas here in the next few weeks, that's gotta be a perfect shorting opportunity. Reason: continued weak demand, especially after the hot summer. Kinder Morgan announced flat earnings despite desperate cost-cutting measures.
Yes, it's still in a downtrend, but the thing is $2.7 right now. I am looking to buy around $2 as much as I can afford a drop to lower with the intent of holding it for ever or until another bubble occurs. Smart people take trades they can never lose. How can you lose buying and holding at 2$ If it ever goes to 8-10 again, that's $60-80,000 per contract you're holding. Buy 10 and you never have to work again.
http://www.tradingeconomics.com/commodity/natural-gas There have been spikes up to 10-14. But even 6 would return a sizable chunk of change if you can wait long enough and have enough $ to hold.
Ugh.....it doesn't quite work like that. You have to "roll" the contract. And the contango will keep you from making that "big score". In order to catch a move like that you are going to have be long peak winter gas which trades at a premium to summer. You are not going to be able to buy winter gas at 2.00.
Demand is actually very strong right now. ERCOT is having the strongest demand ever right now and all along the south. The issue is not demand, the issue is the supply overhang. We are eating into that supply at a pretty good pace right now.
I been buying NatGas hedged since May 2009, it moves to go up full point for my first target, the worse was buying it I think it was April 2012, watch it go to approx. 6.5 then eventually stop me out, I hadn't worked out on hedging open profits yet, so stopped out. But had added along the way to make first targets, I recall many of my friends were laughing as we all do of how I throw away houses, but this IS the only system I have traded the longest and it aims to get the homerun trades eventually. But in my mind, I licked not being able to follow my rules no matter what, I know one day NatGas will get to 75% of nine year range, guessing friends won't answer the phone then. Like long ago when I lost often and laugh from all the losses, I still laugh when I throw away huge percentages, really don't know why, but I laugh when I do well now too, but more quietly, am just very happy I can be alive and laugh. I am long since March, rollovers of course, have added few times, but staying long. Have a Great weekend all.
This post is absurd. If you hold gas long term you are liable to actually go negative! Yes, you can actually go negative. You cannot simply hold it as the roll yields will kill you. It doesn't matter if gas goes to 100, you could still lose 100% or more. Why is this so hard for ET to understand. I am just baffled by how some on this website have a complete and total disregard to money. I'm even further baffled by why many don't spend maybe 10 minutes doing research on this. Here is a chart of UNG. UNG "pays" the roll every single month. This is NOT a leveraged ETF. So don't anyone start on how it's only down because of the leverage. If you bought UNG in 2008 and "held long term" this is the result. There was no way out of this trade. Period! There is no "it will eventually go up to it", the roll will kill you and it's a seasonal roll so it's not like something that happens once every blue moon, it happens EVERY SINGLE YEAR! Your friends were laughing Handle because they saw this chart. They were not laughing with you, they were laughing "at you". '