34 replies to this topic

[dougie]

 

 

my guess is NG is a key part of the war on Russia : so all bets are off

I think so too!  As I wrote earlier there is more than supply and demand here.  It's very suspicious. There's something nefarious going on in the Natural Gas market.

 

The Freeport LNG plant in Texas had a fire back on June 8, 2022 which took them offline. The initial restart of Freeport's liquefaction facility is scheduled for the second half of January 2023 pending federal regulatory approval.  Why haven't we heard anything yet?  If Freeport can start exporting U.S. gas again this will help stem the bloodbath in the price of natural gas.

 

The colder weather in the United States has not stopped natural gas from falling either.  Nothing seems to matter regarding natural gas.  It just continues to decline day after day, week after week, month after month.  Look at a chart.  I've rarely in my lifetime seen such a steep decline.  It's literally almost straight down since the middle of Dec 2022.

 

At the same time as Natural Gas prices plunge I got the most expensive gas bill I've ever had in my lifetime 2 days ago.  I live in Japan and we use gas for hot water and cooking.  It was crazy expensive while my natural gas ETF is getting slaughtered!

 

One of the greatest shorts ever.

 

 

did you get a bite?

[Ken]

Volume spiked on UNG on a big down day (Thurs, Jan 26).  Is that capitulation in natural gas?

 

[dougie]

guess not

[Ken]

Here are some fascinating info about natural gas prices right now.

 

(1) UNG (United States Natural Gas Fund) on Wed, Feb 1st had a volume of 48,111, 386.  Usually the daily volume is between 4 million to 9 million shares.  This daily volume of 48 million is a record high! 

 

(2) If Natural Gas closes down again this week at the end of Fri, Feb 3rd that will be the 7th consecutive down week.  I've seen 6 consecutive negative weeks before but I don't think I've ever seen 7 consecutive negative weeks in anything but maybe I've just forgotten.  Is natural gas going to trade negative for an 8th consecutive week?  Come on!

 

(3) Natural Gas (Continuous Contract) as of the close on Wed, Feb 1st at $2.468 is 47.5% below the 45 day simple moving average.  This is a record.  I can't find any stock, commodity, asset of any kind that has ever traded more than 47% below the 45 day MA in the last 20 years other than crude oil which crashed to below $0 in April 2020!

 

The decline in natural gas to $2.47 is now more than 75% off from the highs of $10.03 on August 23, 2021. This decline is as bad as Bitcoin. However, the decline in Bitcoin took a year.  Natural gas is a necessary commodity for the world and it is has fallen more than 75% in 5 months!  This is getting ridiculous.

 

At $2.47 I'm certain there are natural gas producers who are losing money.  Now it's only a matter of time before U.S. gas companies start to shut down some production.

Edited by Ken, 01 February 2023 - 09:28 PM.

[K Wave]

I am in just below 2.50....will add more if goes lower....once it turns, bounce should be sizable in % terms.

[Chilidawgz]

[Ken]

I've dollar cost averaged in with 3 purchases of the Horizons BetaPro Natural Gas Leveraged Daily Bull ETF (Ticker Symbol: HNU) which trades on the Toronto Stock Exchange. I plan to make a 4th purchase today. 

 

I'm bullish on Natural Gas because this extreme sell-off is a buying opportunity.  I'm bullish because of cycles and of financial astrology.

 

I follow Raymond Merriman's analysis and according to him Saturn will ingress into Pisces on March 7, 2023 and will stay there until May 25, 2025.  Saturn = restrictions.  Pisces rules oil and natural gas.  The interpretation of Saturn transiting through Pisces from March 7 implies a restriction on the supply of oil and gas which means higher prices for oil and gas.  I think a possible supply shortage in oil and gas makes sense considering the current geopolitical environment.

 

Europe got extremely lucky with an unusually warmer than average winter.  But what about next winter?  China has reopened after years of Covid lock downs and if China's economy starts growing again they'll be importing more natural gas.

 

Then there are the cycles.  Merriman doesn't follow natural gas cycles but he does follow oil cycles. When oil bottomed out in April 2020 that was a 36 year cycle low. The 36 year cycle further subdivides into two 18 year cycles.  The 18 year cycle further subdivides into two 9 year cycles.  And the 9 year cycle further subdivides into three 3 year cycles.  It's highly likely oil put in its first 3 year cycle low back on Dec 9, 2022 at $70.08. Oil is still early in its 36 year, 18 year, and 9 year cycles so it is still bullish and likely to move much higher.

 

It's my opinion natural gas is following a similar pattern.  Natural gas put in a 36 year low back in June 2020 at $1.517 (2 months after oil's 36 year cycle low).  I believe this current extreme sell off in natural gas is the first 3 year low (within the first 9 year cycle) and it is due anytime between Jan 2023 and Dec 2023. But this relentless sell off is so extreme that this is the kind of price action seen during larger cycle lows.  IMHO, this is probably the 3 year cycle low bottoming here.  I can't tell the exact day but it has to be soon as in the next few days or weeks if it's not in already.  I also don't believe natural gas will fall all the way back down to $1.52 which is the 36 year cycle low.  Just my thoughts.  I could be wrong.

[dougie]

thanks

Edited by dougie, 02 February 2023 - 08:39 PM.

[Ken]

I honestly can't believe this discussion doesn't have more activity.   Natural gas is where all the action is. 

 

Anyway, natural gas closed on Fri, Feb 3rd at $2.41 for its 7th consecutive down week.  How many times do you see 7 consecutive red weekly candlesticks?  Not often. At one point natural gas traded as low on Friday at $2.34.  We haven't seen prices that low since Sept 2020. 

 

Is everyone's gas bill going down? No. I didn't think so. Here in Japan all the various utility companies are asking the national government for permission to raise rates.

 

Buy when there's blood on the streets.  I've been dollar cost averaging since Dec 23, 2022 and I'm getting slaughtered.  There's been blood on the streets for the last 2 months in natural gas. When is this massive sell off going to end?

 

Texas consumes the most natural gas at 15.2% as a share of total US gas consumption (2021 data).  California is 2nd with 6.8% of consumption.  Texas had horrible weather recently with cold temperatures, freezing rain and sleet and still natural gas fell. Not a little bit.  A lot!

 

And who in the hell would still be shorting gas at these prices after months of selling?  They would have to be really greedy and/or stupid.

[K Wave]

I have been in and out 3 times on this now...I buy when each wave down stalls, and then if it fails to overcome short term resistance on the ensuing bounce, then hop out for small gain.

 

This is how I top and bottom hunt.

 

Latest entry around 2.36. Even though it potentially topped at at 2.43 today, I held this one for possible gap up on Monday, as after 9 days pretty much straight down since last major down wave began on the 24th Jan, we may be real close to an explosive up move, and it could easily start with a gap up.

 

And at 2.36, willing to start accumulating here, even if it drops under 2 for a bit. Am guessing we see at least 3.75 at some point in coming weeks, and that would be a huge gain from here.

 

This is absurdly oversold.