Someone's puking. Natural gas has been diverging big time from crude the last 40 minutes. Every time I say I'm going to be more patient with my next entry and be cheaper on the move in it will undoubtedly run away from me. I just have to stick with my initial entries. Maybe I should write them down so I don't keep mentally changing them. Well at least this time I had the balls to sit on the spread. Did you see Sean Peyton's fake punt from his own 25 last week? That guy has some balls. Can't believe the Bears beat him. Rex Grossman is such a turd burglar. $0.20 x 10,000 x ___ contracts in 2 hours. I am once again very very impressed.
OK, I will set up a target right now for the spread. I am thinking March NG could go over April NG by $0.20-$0.40 if the weather holds at this level for two more weeks (Thinking NG March could go from $7.31 currently to the lower $8's which seems to historically corresponds to $0.25-$0.50 March over April. Is that a reasonable target? Thoughts?
i like it to at least .40 over as there is a huge short in the march and the shorts tried to beat it down by selling more today, now in their face. This was one of the greatest intraday reversals I have witnessed, i saw size being sold under $7 and now these guys are in the penalty. I figure a long fund will run this up overnight on illiquidity to futher the pain until tomorrow mornings liquidity is back. My next major area of resistance is 7.915 then it is the 9.05 ultimate target I have touted. You will love this, BRIAN HUNTER has raised about 1 billion to trade again is what i am hearing, don't know the details but assume he has started his own deal.
What a great industry. You can lose people all their money and still find gainful employment, hah. I hope he tries to vindicate himself by doing the Amaranth spread again, hehe. I wonder if John Arnold and Ken Griffin are lying in wait. I bet they're salivating. What do you think Hunter's going to try?
Kenneth Griffin is my idol. I hear Ken had a satellite feed in his dorm room and would trade in between classes. That's pretty ballsy, I keep my laptop with me in class, but I guess since Ken was doing mostly automated trading and arbitrage he didn't have to always watch the screen. He was actually a contemporary of my sister in the 1980's in Cambridge. Too bad she didn't date him. What do you think of John Arnold and Centaurus? I hear they made out even better than Ken on the downfall of Amaranth
Look at the funds puke up the short march/long april spread with little change on the underlying!!! Have they capitulated? +0.02 April over March to -0.04 April over March in 1 hour!! My god! Look at it! It's a complete collapse from +0.06 yesterday
Booked the short spread at -$600 per spread from +$330 per spread, booked the outrights at $7.60 from $7.40. I'm going to try and re-enter around $7.50 overnight. Comanche, good call, yet again, on the crude run up. What are you going to buy with all that money you made the last week? A steak dinner? Do you think we'll have a small profit taking pullback overnight on NG?
what do you think of the Mar/Apr spread open interest numbers increasing to this point - 140k for Mar, 110k for Apr. Is this merely additional pressure trying to squeeze the heavyweight? or merely people just rolling over their Feb and Mar outright positions?
tough call as I saw heavy size being offered on the runup of the march leg in the spread which tells me that the funds are trying to defend this here. Some of my buddies that run spec books at other shops have been short the march side as well but are now reversing. I really like this spread to blowup and will add size on another pullback IF we get one, as it will be fund paper on the defense again. I can easily make a case of that spread blowing out HUGE again when march is prompt next wednesday afternoon in the face of siberian sourced arctic air and a probable spot market gas price of $90.00+ in the NE. Most futures traders are not aware that regional spot prices have visited $90.00 per MMBtu or more several diferent winters on deliverablity issues (capacity shortage), but have usually been the transco pipeline Z6 NYC point. Feb 25,26,27th of 2003, during a widespread cold outbreak similiar to what is being modeled, spot prices widely traded $20.00+ for those days including points in texas, louisiana all the way up! and that is when the H/J spread blew out $2.75 in 2 days last. 2 traders from reliant energy lost $80 million on that blowup and they didn't really have the same size on that is now being carried by funds. THAT is the dynamic that is exciting me about this play. Everyone knows that the storage levels are comfortable at this point but the natty market LOVES to stop out the pain and fade all logic. BTW, ol' t-boone has been agressively getting long in here per some of my buddies, and he should keep the market well bid on dips to maintain momentum on his position. I hope we can all make some good $$ on this move.