Production of natural gas (NG) in December 2012 dropped 1.1%. Many energy companies shut off wells to raise NG prices. You can see below how the rig count has dropped considerably here in the U.S. as the average spot price at Henry Hub also dropped. See how many rigs were operating when NG was trading over $12.
Last week May 2013 NG opened at $3.680 MMBtu and closed the week at $3.909. The latest move up started Feb. 19 as price moved back above $3.300. We will see how quickly NG gets above $4.00.
Proceed to Page 2 for the latest COT Data...
Now take a good look at the COT Disaggregated Report. See how Managed Money started a bull posture back in February by liquidating net shorts from -82,685 contracts on Feb. 22 to -67,690 contracts on March 1. Two more reports and we see last week that Managed Money is now net long 1,462 contracts. Swap Dealers through this time were liquidating net longs.
Looking back on the report you can see what this action by Managed Money did to the price action of NG. And the cold first day of Spring here in Chicago should also help push up NG.
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.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.
Proceed to Page 3 for this week's detailed fundementals...
On the daily chart below you can see that this is a very strong trending market reflected in ADX above 50. MACD is bullish and Stochastics are in overbought territory. Also on the daily chart you can see where the TS Analyzer highlighted it was time to look for a long entry. Not a bad catch, especially with big money’s bullish posture.
Click to enlarge.
On the weekly chart ADX is on the rise now at 33 showing a strong weekly trend and weekly Stochastics are in overbought territory.
Have a prosperous trading week.
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