In Position: Natural Gas (UNG)

It was a wild ride in the futures market starting this morning around 6:30 a.m. EST.

Nat-gas, is similar to silver where it likes to spike lower or higher as its terminating move. 

From a UNG standpoint, that lower pre-market spike was all the way down to 10.66. 

Price action recovered and was essentially back in the previous day’s trading range before the regular open.

As done yesterday, the chart of UNG has been modified to show the NGX20, futures activity.

Doing so, paints a more realistic picture of what’s going on.

As of this update, UNG is at 11.16 and has already posted a new daily high (a classical analysis buy signal).

Using the weather:

As we enter a grand solar minimum, weather forecasting (to predict nat-gas moves) is not viable.

The weather is already extreme and will continue.

Earthquake activity has picked up dramatically … it’s off the scale; no pun intended.  In addition, we’ve got weather extremes, crop failures and volcanic activity.

All of this is happening at the same time.  The source at this link does an excellent job of monitoring earthquakes and associated phenomena.

These two links, here and here are good source for weather extremes and crop failures.

Unanticipated weather extremes could launch nat-gas, UNG to levels atypical for a seasonal (winter) position.

One well placed earthquake fracturing gas distribution lines, could do the same.

Typical nat-gas move:

A seasonal nat-gas move, starts around late September, early October and tops out just before December.

The possibility of weather extremes could push that top out into January or February … completely unexpected.

Price action is the key. So far, it’s moving off the danger point to slightly higher levels.  We’ve opened a sizeable position and will follow the price action on up with a stop as needed.

Depending on how that action behaves, the current stop level (not advice, not a recommendation) is tentatively set close to yesterday’s low:  UNG 10.98

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.
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