Good article about the current state of the Natural Gas Market. By John Kemp LONDON, Nov 15 (Reuters) - Hedge funds have tempered their earlier bullishness towards U.S. natural gas and heating oil as unusually warm weather has persisted nearer to the heart of the winter heating season. Hedge funds and other money managers slashed their net long position in the U.S. natural gas futures and options by 1,241 billion cubic feet or 45 percent over just three weeks to Nov. 8 (http://tmsnrt.rs/2ftMy6T). Hedge funds have also reduced their net long position in heating oil futures by 10 million barrels or 55 percent in the seven days to Nov. 8, according to an analysis of data published by regulators (http://tmsnrt.rs/2eW724c). Unusually warm weather across most of the continental United States that started at the end of May has stretched well into November, cutting early heating season fuel consumption. U.S. heating demand has been at or below the long-term average every day since the start of the heating season on July 1 (http://tmsnrt.rs/2ftNHve). Cumulative heating demand so far has been 25 percent below the level in 2015/16, which was the warmest winter on record. Cumulative demand is also 42 percent below the long-term average, according to the U.S. National Oceanic and Atmospheric Administration (http://tmsnrt.rs/2ftIX8X). Hedge funds and many other traders were initially prepared to look past the warm start to the heating season because so much of total heating demand is normally concentrated in the core winter period stretching from December through February (http://tmsnrt.rs/2ftPQqC). But as the warmer-than-normal weather has persisted well into November the risks of another very warm winter have been revised higher. Most hedge funds seem to have predicted the winter of 2016/17 would be significantly cooler than the record warm winter of 2015/16 based on a degree of mean-reversion (http://tmsnrt.rs/2ftThOe). That forecast was reasonable and may well turn out to be correct, but the run of above normal temperatures well into November has reduced confidence in that outlook. Much colder weather is on the way for the east coast of the United States, according to the latest forecasts from NOAA. Temperatures across the eastern population centres will be below normal from around Nov. 20 onwards which should produce much higher heating demand. The build up of short positions in both U.S. gas and heating oil derivatives has left both vulnerable to a short-covering rally if the weather looks like turning persistently colder. For now, however, the abnormally warm start to the heating season has forced traders to reassess the probability that the forthcoming winter will be much cooler than 2015/16 and with it their bullish bets on fuel prices. (Editing by David Evans) John Kemp Senior Market Analyst Reuters Twitter: @JKempEnergy
Just a heads up, the crackpipe is being forcefully removed from some of our mouths: 3X WTI etfs (UWTI/DWTI) are getting delisted next month, with 3x gold mining etfs (JNUG/DUST) to follow. http://www.prnewswire.com/news-rele...nces-of-its-dwti-and-uwti-etns-300364595.html
I created a custom numberline table in ToS that some here might be interested in. Nothing too sophisticated, but it calculates automatically and allows me to watch 100 instruments at a time, so it is useful. It provides rolling 10-day numberline summation scores using the following daily scoring system: Close>Close[1] AND Vol<Vol[1] = 1 C>C[1] AND V>V[1] = 2 C<C[1] AND V<V[1] = -1 C<C[1] AND V>V[1] = -2 The 5 little boxes in each grid are as follows: 3P = green if current close is above 3-day rolling pivot range, grey if in the middle of the range, red if below. Box 2: Rolling 10-day #L score as of yesterday. Box 3: Rolling 10-day #L score as of 2 days ago. Box 4: Rolling 10-day #L score as of 3 days ago. Box 5: Rolling 10-day #L score as of 5 days ago. The boxes highlight bright green/red if the score is above/below 8/-8, and you can adjust the settings. Obviously this is definitely different than the traditional #L, but I've found it useful to see where money is flowing in/out using price and volume...plus its nice not to have to spend 30 minutes a day doing this in Excel after the market closes like I was. Using the attached template as a starting point, I'm pretty sure that it would be fairly straightforward to create the traditional Fisher ORB numberline scoring system in ToS. If anyone wants to collaborate on that project, let me know. Link to grid below: http://tos.mx/GhWldW
Hello, I would like to... I use TOS, I have many thoughts that are really questions... maybe PM you ?
How to measure position size relative to portfolio when you get a entry point using a macro ACD ? Have not found any posts about this topic ?
Just my opinion, but it depends what you are trying to do. If you are scalping, it can be something tiny like 1-tick stop below the low of a 5-minute bull bar that occurred after a pull back from back into the OR after a good A up has been made. If you are a position trader and you get long on a monthly A up, it could be 1-tick below the monthly A down level (therefore forcing you to trade small since the stop could be very wide). If you are an aggressive position trader, perhaps you get long on a monthly A down signal betting on a failure of the A down, and therefore can use a very tight stop and put on a much bigger size position expecting an immediate reversal up. Like I said, it depends on what you are trying to do. In my opinion it would be crazy to be taking large risks (>2-3% of portfolio on any single trade regardless of what one is trying to do).
More interest in position trading with options based on entry from numberlines, still trying to learn that aspect inside out. I agree with > 2% rule however not entirely sure its all correct. What I mean is nothing is fixed, for example if Vol is a certain level that may determine my stop to a degree and also size.... I havent fond any calculation for this.. I did read where A values can be measured at 25 percent or so of a 9 period ATR ...