Last week March 2012 natural gas opened Monday January 30 at 2.810 and closed the week at $2.499. On the first trading day of January, March 2012 natural gas opened at $2.986.
Look at the below fundamentals of natural gas taken from the EIA website. We are dealing with record high inventories and the warm winter weather has not helped with demand. Living in Chicago, I know my January heating bill was much lower than last January, and I am not complaining.
On Jan. 23 we saw this market look to be starting a ride up. What caused this? Actually, Chesapeake Energy Corp., a large natural gas producer, announced plans to cut back production. The market came up and tested $2.800 for a number of days then headed back down.
On the daily chart below we see ADX numbers dropping showing a weakening trend. ADX was over 60 before the Chesapeake announcement. Both +DI and –DI are dropping. MACD did cross up over the signal line on Jan. 23 and did add some divergence. That was short lived as now divergence has dropped. Stochastics corrected from deep oversold territory and today are mid-range and pointing up. Check out when Trends in Futures issued a sell signal. Not bad for two months of work.
Proceed to Page 2 for the latest COT Data...
COT Data
On the weekly chart take a real good look at what is really happening with big money by analyzing the COT Disaggregated report. See how Swap Dealers and Managed Money are posturing right now? Can you not see what will need to happen to truly start natural gas heading up?
|
Commodity |
12-mo low |
12-mo hi |
3-Feb |
27-Jan |
|
Cattle (feed) |
-1,545 |
5,543 |
-1,545 |
-952 |
|
Cattle (live) |
-40,877 |
10,437 |
-20,581 |
-14,687 |
|
Hogs |
-46,574 |
21,270 |
-10,784 |
-12,200 |
|
Corn |
-413,915 |
-36,487 |
-100,112 |
-74,077 |
|
Oats |
-7,738 |
290 |
290 |
232 |
|
Soybeans |
-202,008 |
28,178 |
-18,996 |
-18,677 |
|
Soybean meal |
-82,242 |
32,081 |
4,796 |
5,836 |
|
Soybean oil |
-117,444 |
29,745 |
20,335 |
14,365 |
|
Wheat |
-32,577 |
87,922 |
-11,802 |
80,852 |
|
Orange juice |
-22,341 |
-9,769 |
-15,395 |
-15,002 |
|
Coffee |
-43,546 |
1,153 |
-7,132 |
-7,526 |
|
Cocoa |
-41,808 |
10,252 |
3,116 |
5,733 |
|
Sugar |
-208,312 |
-25,626 |
-72,748 |
-76,965 |
|
Cotton |
-43,495 |
-2,152 |
-25,093 |
-26,240 |
|
British pound |
-66,435 |
88,682 |
40,280 |
48,063 |
|
Canada dollar |
-115,190 |
25,942 |
6,645 |
6,880 |
|
Euro FX |
-124,855 |
197,616 |
183,925 |
197,616 |
|
Japanese yen |
-64,864 |
76,983 |
-53,061 |
-35,664 |
|
Swiss franc |
-42,387 |
26,491 |
14,935 |
19,470 |
|
US dollar index |
-53,158 |
14,003 |
-44,432 |
-53,023 |
|
Mexican Peso |
-140,414 |
39,901 |
-22,088 |
-6,459 |
|
Australian dollar |
-110,025 |
479 |
-88,177 |
-80,472 |
|
S&P 500 |
-77,473 |
73,398 |
-28,683 |
-14,494 |
|
T-note -10 yr |
-49,750 |
229,611 |
83,967 |
138,445 |
|
T-bond -30 yr |
-20,389 |
88,803 |
16,517 |
37,189 |
|
Eurodollar |
-408,407 |
1,126,194 |
-104,346 |
462 |
|
Crude oil |
-319,669 |
-114,385 |
-201,460 |
-205,267 |
|
Heating oil |
-58,687 |
-4,204 |
-44,042 |
-41,182 |
|
RBOB Gasoline |
-96,348 |
-38,417 |
-96,348 |
-89,715 |
|
Natural gas |
104,416 |
228,910 |
104,416 |
118,212 |
|
Copper |
-35,687 |
14,419 |
-1,225 |
174 |
|
Gold |
-287,634 |
-159,153 |
-209,862 |
-179,768 |
|
Platinum |
-35,249 |
-18,670 |
-29,472 |
-25,682 |
|
Silver |
-57,793 |
-14,132 |
-28,729 |
-25,021 |
Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
If you need help understanding how to understand how to use the NEW COT report to your benefit get instant access to my new e-book “What Lies Beneath ALL Trends”. It is filled with eye opening information.
Proceed to Page 3 for this week's detailed fundementals charts...
Fundamentals (data from EIA)
The forecast of average household heating expenditures for all heating fuels has been lowered from the first forecast for the current winter published in the October 2011 Outlook, primarily as a result of the warm first half of this heating season. Average household heating oil expenditures now are expected to increase by 4% this winter heating season (Oct. 1 to March 31) compared with last winter. In contrast, natural gas and propane expenditures are projected to decline by 7% and 1%t, respectively, and electricity expenditures are 2% lower than last winter’s levels.
Natural gas working inventories continue to set new record highs and ended December 2011 at an estimated 3.5 trillion cubic feet (Tcf), about 12% above the same time last year. EIA’s average 2012 Henry Hub natural gas spot price forecast is $3.53 per million British thermal units (MMBtu), a decline of almost $0.50 per MMBtu from the 2011 average spot price. EIA expects that Henry Hub spot prices will average $4.14 per MMBtu in 2013.
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