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#31 TenaciousG

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Posted 02 September 2009 - 09:53 PM

PD - joined you in the NatGas trade bot NGV9 @ $2.674 will short next months contract if it begins to move against me.
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#32 psyche doctor

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Posted 02 September 2009 - 09:56 PM

Thanks PD and MD - my only thought is that the long NatGas and short Oil is too crowded and the big boys want to lean on those trades. Fundamentals seem to have little to do with markets these days.

PD - My grandmother is from New London, Texas and I remember her telling me the story of the natural gas explosion in the school which is the reason why an odor was added to natural gas. http://en.wikipedia....chool_explosion


Interesting story Tenacious. I have a friend from down home who has natural gas wells on his property. Interestingly, sometimes in certain areas you can see the stuff coming through the ground. He runs his grain elevators, heats his shop, barns, house, and neighbors houses with the stuff and it's all free.

I don't know what kind of trader you are, but this long nat gas position could just be a scalp for me as this thing seems to have no bottom. This thing needs a major hurricane or something to slow it down, not that cheap nat gas is all that bad, though.
I watched a snail crawl along the edge of a straight razor. That's my dream; that's my nightmare. Crawling, slithering, along the edge of a straight razor... and surviving

#33 DrStool

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Posted 02 September 2009 - 10:09 PM

They’re Manufacturing Data


by Lee Adler, Wednesday, September 2, 2009, in Economics, Today's Markets | Permalink |Comments (0) Edit There were two pieces of economic data released today. The ADP unemployment data is a prelim to the weekly unemployment claims, and is a bit of a so what. So are factory orders, but let’s take a look at it see to see if there’s any evidence of green shoots, or the latest term of art “stabilization.”

The chart below shows new factory orders, inventories, and the inventory to sales ratio, all not seasonally adjusted. I don’t like seasonally adjusted data. It’s just a way for the data provider to smooth out the numbers so that we can’t tell what’s really going on. There are better ways of looking at the raw data in order to discern whether the trend is improving or not.

(Continued)

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#34 Jorma

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Posted 02 September 2009 - 10:12 PM


I've been through this before. Everything I say here is an over simplification admittedly. The fundamental situation short term is one of the worst in the modern history of commodities. The market essentially is one big pipe and it's a national/continental market. (there are 4 or 5 but what the hell) Every continent has it's own supply demand balance. All supplies are connected to the one pipe. The storage is almost full. (I suspect the total stored represents at least a year of usage but don't quote me on that) Unlike virtually any other thing on earth there is virtually no cost to produce gas once it is flowing out of the well into the pipe. All the costs are pre production. Even oil has some pretty large costs associated with extraction and delivery costs and then of course it must be refined.

There has been a very large increase in supply in recent years because of new techniques which made bringing the wells to production expensive. The owners need to recoup that and remember, it costs them nothing essentially to deliver. Their cost is already sunk. So prices have now reached essentially zero and still they deliver. They hate it I suppose but they have debt to service and 1 dollar s better than no dollars. These wells are a long term investment and to lose it now would be a tragedy. After all it's a commodity.

Demand for gas is inelastic. Any expansion into transportation is problematical because of the costs of infrastructure to distribute it s stupendous and then too the energy density of gas is around 40% lower than gasoline so the range is limited, unless vehicles are designed around more storage, meaning from scratch. It has to be kept at very high pressure and very low temperature which requires insulated tanks. Natural gas is different than propane in this regard so too it cannot be distributed for home heating like propane. Not easily anyway. Home heating might be getting cheaper but that hasn't stopped the abandonment of hundreds of thousands of homes and a standstill in new building.

70% of new electrical generation over the last decade or more has been natural gas based. This is a stupendous way to generate electricity, using gas turbines and using the waste heat to make steam. It's efficient, clean, can be started and stopped on a dime. Relatively cheap to build. Beautiful. As long as the price of gas is moderate. But of course it's a commodity. For how low the price is now we know in 5 or 10 years it will have huge spikes which makes the green eyeshade guys wary.

Demand isn't going to go up quickly even if it's free.

Every single thing above is as I said highly over simplified. However save another big hurricane heading right up the mouth of the Mississippi again and any rally in the foreseeable future will be technical. Not to discount technical, and liquidity, just saying. Sure NG could double quickly. C did in 30 days too. No icky futures or ETF's either.

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#35 TenaciousG

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Posted 02 September 2009 - 10:23 PM

Interesting story Tenacious. I have a friend from down home who has natural gas wells on his property. Interestingly, sometimes in certain areas you can see the stuff coming through the ground. He runs his grain elevators, heats his shop, barns, house, and neighbors houses with the stuff and it's all free.

I don't know what kind of trader you are, but this long nat gas position could just be a scalp for me as this thing seems to have no bottom. This thing needs a major hurricane or something to slow it down, not that cheap nat gas is all that bad, though.


PD - I trade mostly index, oil and euro fx futures. Some equities when the opportunity presents itself. I attempt mostly swing trades but that is a tough proposition these days. I have an uneasy feeling about this month and will keep my trades on a tight leash.
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#36 mdporter

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Posted 02 September 2009 - 11:03 PM

Here's a gold chart from thirdeyeopen trades on the stockcharts.com public chart list:

Attached Thumbnails

  • sc_461.png

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#37 Peek Paper

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Posted 03 September 2009 - 12:21 AM

Interesting story Tenacious. I have a friend from down home who has natural gas wells on his property. Interestingly, sometimes in certain areas you can see the stuff coming through the ground. He runs his grain elevators, heats his shop, barns, house, and neighbors houses with the stuff and it's all free.

I don't know what kind of trader you are, but this long nat gas position could just be a scalp for me as this thing seems to have no bottom. This thing needs a major hurricane or something to slow it down, not that cheap nat gas is all that bad, though.

I dunno ...

I've flown out of DFW 3 times in the past 2 weeks. The Barnett shale rigs that formerly to pumped 24/7 are now dormant. For several reasons, to be sure (geologic especially). But still, at 7-8 bux, they'd be 24/7 again.

We (USA) are one Gulf hurricane and one October East Coast blizzard away from 7-8 dollar gas. I takes my chances with UNG ... and continue to hold.
The deeper you dig into a pile of dung, the worse it smells ...

#38 psyche doctor

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Posted 03 September 2009 - 12:46 AM

I've been through this before. Everything I say here is an over simplification admittedly. The fundamental situation short term is one of the worst in the modern history of commodities. The market essentially is one big pipe and it's a national/continental market. (there are 4 or 5 but what the hell) Every continent has it's own supply demand balance. All supplies are connected to the one pipe. The storage is almost full. (I suspect the total stored represents at least a year of usage but don't quote me on that) Unlike virtually any other thing on earth there is virtually no cost to produce gas once it is flowing out of the well into the pipe. All the costs are pre production. Even oil has some pretty large costs associated with extraction and delivery costs and then of course it must be refined.

There has been a very large increase in supply in recent years because of new techniques which made bringing the wells to production expensive. The owners need to recoup that and remember, it costs them nothing essentially to deliver. Their cost is already sunk. So prices have now reached essentially zero and still they deliver. They hate it I suppose but they have debt to service and 1 dollar s better than no dollars. These wells are a long term investment and to lose it now would be a tragedy. After all it's a commodity.

Demand for gas is inelastic. Any expansion into transportation is problematical because of the costs of infrastructure to distribute it s stupendous and then too the energy density of gas is around 40% lower than gasoline so the range is limited, unless vehicles are designed around more storage, meaning from scratch. It has to be kept at very high pressure and very low temperature which requires insulated tanks. Natural gas is different than propane in this regard so too it cannot be distributed for home heating like propane. Not easily anyway. Home heating might be getting cheaper but that hasn't stopped the abandonment of hundreds of thousands of homes and a standstill in new building.

70% of new electrical generation over the last decade or more has been natural gas based. This is a stupendous way to generate electricity, using gas turbines and using the waste heat to make steam. It's efficient, clean, can be started and stopped on a dime. Relatively cheap to build. Beautiful. As long as the price of gas is moderate. But of course it's a commodity. For how low the price is now we know in 5 or 10 years it will have huge spikes which makes the green eyeshade guys wary.

Demand isn't going to go up quickly even if it's free.

Every single thing above is as I said highly over simplified. However save another big hurricane heading right up the mouth of the Mississippi again and any rally in the foreseeable future will be technical. Not to discount technical, and liquidity, just saying. Sure NG could double quickly. C did in 30 days too. No icky futures or ETF's either.



I hear what you area saying, but I don't trade on funnymentals, just pure technical, leverage it and trade the squiggles. I just dumped my nat gas longs for about 3k profit and will go at it again tomorrow, looking for any opportunity, anywhere. With so many futures contracts to trade, there is always something to exploit. Often times, I feel like a pirate, raping, looting, and pillaging.
I watched a snail crawl along the edge of a straight razor. That's my dream; that's my nightmare. Crawling, slithering, along the edge of a straight razor... and surviving

#39 Goldmember

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Posted 03 September 2009 - 12:59 AM

I've been through this before. Everything I say here is an over simplification admittedly. The fundamental situation short term is one of the worst in the modern history of commodities. The market essentially is one big pipe and it's a national/continental market. (there are 4 or 5 but what the hell) Every continent has it's own supply demand balance. All supplies are connected to the one pipe. The storage is almost full. (I suspect the total stored represents at least a year of usage but don't quote me on that) Unlike virtually any other thing on earth there is virtually no cost to produce gas once it is flowing out of the well into the pipe. All the costs are pre production. Even oil has some pretty large costs associated with extraction and delivery costs and then of course it must be refined.

There has been a very large increase in supply in recent years because of new techniques which made bringing the wells to production expensive. The owners need to recoup that and remember, it costs them nothing essentially to deliver. Their cost is already sunk. So prices have now reached essentially zero and still they deliver. They hate it I suppose but they have debt to service and 1 dollar s better than no dollars. These wells are a long term investment and to lose it now would be a tragedy. After all it's a commodity.

Demand for gas is inelastic. Any expansion into transportation is problematical because of the costs of infrastructure to distribute it s stupendous and then too the energy density of gas is around 40% lower than gasoline so the range is limited, unless vehicles are designed around more storage, meaning from scratch. It has to be kept at very high pressure and very low temperature which requires insulated tanks. Natural gas is different than propane in this regard so too it cannot be distributed for home heating like propane. Not easily anyway. Home heating might be getting cheaper but that hasn't stopped the abandonment of hundreds of thousands of homes and a standstill in new building.

70% of new electrical generation over the last decade or more has been natural gas based. This is a stupendous way to generate electricity, using gas turbines and using the waste heat to make steam. It's efficient, clean, can be started and stopped on a dime. Relatively cheap to build. Beautiful. As long as the price of gas is moderate. But of course it's a commodity. For how low the price is now we know in 5 or 10 years it will have huge spikes which makes the green eyeshade guys wary.

Demand isn't going to go up quickly even if it's free.

Every single thing above is as I said highly over simplified. However save another big hurricane heading right up the mouth of the Mississippi again and any rally in the foreseeable future will be technical. Not to discount technical, and liquidity, just saying. Sure NG could double quickly. C did in 30 days too. No icky futures or ETF's either.



My town has a high pressure natural gas line going through it. It is the main line that supplies Vancouver Island and our town happened to be fortunate that we were on the route for the pipe. Most houses and industries are hooked in. We've had it for 10 or 15 years now. The last couple of years have seen a high pressure pipe teed off to Whister and buried under the shoulder of the highway. This summer the Terasen crews were digging up junctions of the existing propane distribution grid and converting the lines for natural gas. Different higher pressure valves had to be installed and were the main obstacle to the conversion. Basically a whole lot of holes had to be dug and filled by crews. Hoardes of Gasfitters in town for most of the summer staying in hotels and eating in restaurants. The amount of employment hours and the bussling economic activity that spurs off such a project are a temporary windfall to the local economy. The long term effects are an abundant clean energy for all at a regulated price.

I've been waiting for something like the Phill for home fueling a CNG powered auto. Introduced in 2002, promised for 2005...la de da...ya da ya da 2007...yada yada takeover....yada yada... I'll believe it when I see it... :closedeyes:
Anthony caused pearls to be dissolved in wine to drink the health of Cleopatra; Sir Richard Whittington was as foolishly magnificent in an entertainment to King Henry V; and Sir Thomas Gresham drank a diamond, dissolved in wine, to the health of Queen Elizabeth, when she opened the Royal Exchange; but the breakfast of this roguish Dutchman was as splendid as either. He had an advantage, too, over his wasteful predecessors: their gems did not improve the taste or the wholesomeness of their wine, while his tulip was quite delicious with his red herring.here

#40 Jimbo

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Posted 03 September 2009 - 03:17 AM

UNG STANDS FOR UGLY OR THE CONTANGO TANGO

UNG is too visable and too big - its the dumb money in gas.

Its being front runned to death.

Its the wooly mamoth slowly drowning in the la brea gas futures tar pit - the more gas it buys the further it sinks.

When it starts unwinding its too large position in gas futures contracts - when the punters exit the fun(d) - or UNG is liquidated - that will be the classic buy signal for gas to start to go up.

The smart money - who will be up to the armpits in call options on natural gas producers will then clean up.

Such is life.
timoleon

#41 shorty

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Posted 03 September 2009 - 03:17 AM

going bonkers has become a world-wide phenom that has no limits based on class or culture. I really and truly think people all over this planet are going totally tonto in unprecedented numbers and there is not likely any way to stop it. Just sit back and watch the insanity unfold all around you and hope you don't get drawn into it. Now excuse me please, I have a transmission from the High Council of Zembulon I must prepare myself to receive by sticking two pencils up my nose and donning my tinfoil hat..... woowow

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