> There is an awful lot of talk of $4.50-$5 next year or next and I was wondering if anybody who believes that believe strongly enough to put dollars on the line via futures?
I went long NG futures via the HNU.to 2x ETF on February 17. I was expecting a spike upwards to happen within a week or two after that date. My plan was to take profits on that spike, then switch to an NG short (via HND.to).
It was a bad plan. I could have exited the trade with a 5% profit on the first day, but of course I thought it would go much higher. Instead, it continued to grind lower for the past three weeks, and I just stubbornly continued to hold. I was down almost 40% at the worst of it, but ended Friday down roughly 30%.
So I'm married to the position now.
I still think that there will be a short covering spike at some time, but I don't know when, nor how much lower it will go before that happens.
The thing is, it does seem like supply has already begun to respond, via shut-ins, and we still have not seen the supply impact of less drilling and (perhaps) postponed completions. That is yet to come. Also there is some indication that various types of demand are on the increase.
The main problem has been the astonishingly unsupportive weather for the past 3 or 4 months.
If the weather switches to being supportive, which certainly could happen, and/or some clear supply reduction signals start to look omminous to the traders (certainly will happen eventually), the short covering spike should be spectacular.
Of course, in the meantime the contango roll is continually worsening my loss, but at 0.10 or so per month, though it's serious (4% on the futures, 8% on the ETF) it is survivable if the short covering spike shows up before too long.