NG at a critical area

Nat gas is at a critical area. We had a bounce off the 10 year low, but not that significant imo. 2.4 is a huge resistance because it's not just prev low, but also if we break and close above (preferably 2 days in a row), it'll be a higher high. We haven't had any higher high and higher low for a long long time in Nat gas. If this turns and head back down, I expect a new low.

Let's close above 2.4 and 2.6. Then above 3. We'll see more short coverings and new buyers. I'd be fine if it bounces around between 2.2 and 2.4 for now!  Still a long way regardless.

NG roll over

Roll-over time already!

Sold 2 Apr NG at 1.983
Bought 1 May NG at 2.075
Bought 1 June NG at 2.19

Note that I rolled over 1 NG to June, which is two months out. I did this because not only I think it will take a long time to pan out, but also, to avoid a negative spread often found in a front month contract. What this means is if NG is going up, chances are front month contracts will likely up go faster, but on the other hand, if it goes down, it'll go down faster. Since I'm holding two contracts, I'd like to spread out a bit.

As of today, I'm about -$14,210 YTD. Ouch.

NG roll over

NG made 10 year low today. I don't think my puts will be out of money, so I just rolled NG contracts from Apr to May.

Sold 2 Apr NG at 2.191

Bought 2 May NG at 2.285

My new break-even based on May contract is 2.692

Next week

The Apr options expire on 3/27. My 2.45 put is well in the money. From that position, I'm +$500 or so, but was +$1400 at one point. I was hoping after today's inventory report, it'd go up, but the opposite was true.

The overall theme of NG is that it goes up very little and comes down hard easily. I liked the way it acted over the last few days. Very quite, narrow ranges, not much up or down, which means it was bottoming.

That didn't last long. We're about 5 cents away from the 10 year low. With 3 days to go, my put options will probably be assigned a long position, so I need to roll over on 3/27. At that point, I would be holding 2 longs with the average price of 2.596. Once I roll to May contract, it'll be around 2.7 due to contango.

NG can get very volatile from time to time. I feel as if all I need is two to three solid days. To make that happen, we need some sort of news. At this level, buyers are definitely sitting aside and commercial sellers seem to lock whatever price they can get. Weather doesn't seem to help much and neither does the rig count. They are certainly worried about overflow of underground storage tanks.

A question I keep asking myself everyday is should I add or just sit out.

I'm also looking at other contracts too. It seems both Wheat-Corn trade and Gold-Platinum are available again. I'm hesitant on this because TOS doesn't give you any margin break on spread unlike other good brokers. In addition, what if I need more bullets on NG...

Apple puts also seem interesting. Everybody likes Apple stock. People who lost money in others bought all the AAPL they can afford and sitting on them. If this starts coming down, I think you'll see 550 pretty quick. Chart patterns already look like topping. I'm thinking buying an out of money put and simply forget about it risking 100%.

Close high of the low bar

A very interesting day on nat gas. Today is the first time it closed the high of the low bar (on daily) after making a 10 year low. There were hammer patterns in the last few days, but never had a follow-through (meaning the next day didn't close the high of the previous day's high).

I watched the close of NG and it seemed as if lots of stops run as people tend to put stops just above previous day's high. I'm attempted to add more here, but that will make me feel as if I'm all in. Any thought?

NG update

Only 2 positive days out of 14 recent days. I'm definitely on the wrong side. Sure, it'll bounce some day, but if I were smarter, I would have taken advantage of this down move first before buying it. I feel quite dumb to say the least.

As winter seems to be over, we're into stock-building season again. People are not talking about storage being over-capacity. In other words, there's just too much gas and they can't store gas they collect. What do they do in this case? You'd think not to collect, but from what I hear, they dump and keep pumping new gas.

Sold 1 Apr NG 2.45 put for 0.215

I just sold 1 Apr NG 2.45 put for 0.215 (or $2150 less commissions). For this trade, I want to get assigned, so I went deep in the money. If I get assigned on this on expiration (3/27), my break-even would be 2.5955.

Overall NG looks pretty bad. Charts don't show any sign of bottoming. The only support is that it can't go to zero. Heck, it even broke the triangle to the downside. I planned on scaling in every 0.5, but I waited just to be careful.

What can I do when there's 10 year historical low....