Natural Gas Analysis Report 11-29-18...Price Pauses At The Monthly Demand…Now What??
I last talked about Natural Gas a little over two weeks ago,
Natural-gas futures rallied on Friday to their highest finish in nearly two years. Prices also ended last week with a roughly 13% gain. The Energy Information Administration on Thursday reported inventories in storage totaled 3.208 trillion cubic feet—621 billion cubic feet below the five-year average.
The bull trap didn’t work out, but the Monthly Supply is holding for the moment.
The Natural Gas markets continue to settle down after the significant rise in price earlier this month. The spike in price came out of nowhere and in the process several hedge funds and pension funds suffered major losses. One hedge fund making major headlines was James Cordier, of Optionsellers.com His hedge fund blew up and he loss all of his client’s money selling naked calls on natural gas futures when price shot up nearly 20% in a single afternoon.
On November 15, 2018, OptionSellers.com notified its investors in an email entitled “Catastrophic Loss Event” that it not only lost all their money, but that they would also owe money to Intl FC Stone for margin calls.
If you still don’t know who James was, he was co-author of the infamous, "The Complete Guide to Option Selling book".
So with cold temperatures of 0s to 20s expected for northern and east-central US over the next several days, is the price baked in already or are traders still bullish because of lower than normal natural gas sin storage, lets go to the charts to find out?
If the month supply at $4.75 does hold, the next big supply is at $8.00.
Below price, we have daily demand at $3.50.
And above price, we have daily supply at $6.40.
I honestly thing, price move higher before it move lower in the near future due to price momentum, natural gas lower than expected inventories and winter is just starting. Until next time.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
