Over the weekend, there was a GWDD jump from 344 to 359, which represents a 4.3% increase in expected consumption. 15 GWDD points in January are equivalent to an additional storage withdrawal of ~40–45 Bcf over the forecast period. The main cold is concentrated in the second week of the forecast. This is a golden time for traders, as this period is not yet priced into the market but is already visible to meteorological models.
Additionally, prices will be supported by production, which fell from 110 Bcf to 109.2 Bcf. Any further cooling in Texas could cause wellhead freeze-offs, which would instantly remove another 1-2 Bcf/d from the market; also, terminals are operating at 18.5–19.2 Bcf/d. This is a powerful foundation for the price.
Special attention should be paid to the latest COT report data (as of January 6, published Friday, January 9): the market is in a state of extreme speculative imbalance, with 1,000,000 short positions. Speculators aggressively opened new shorts (+41k contracts) exactly when the price approached the $3.15–$3.18 level. A net short position of 100,000 contracts means that a massive amount of money is bet on a warm winter. GWDD to 359 (+15 over the weekend) is exactly the news that the bears feared most. Given that many entered shorts late Friday, a +4-6% gap on Monday will lead to automatic triggering of stop-losses. Speculators are trapped in record shorts at the very bottom. Monday's opening promises to be volatile; it will not just be growth, but panic closing of short positions.
Those who sold on Friday at $3.20, hoping for $3.00, will see a 359/360 forecast. They have no opportunity for a smooth exit. They will close at market price, buying gas and pushing the price higher. Hedge funds have accumulated -100,000 net short contracts. This is a powder keg. The price increase at the opening will force them to close shorts, which will create a domino effect.
Entry point 3.30 or enter on the first pullback after the gap. Stop Loss $3.20 Take Profit $3.50, $3.58
Idea cancellation: If the 12Z evening run (today) or the 00Z morning run (Monday) shows sharp warming and the GWDD number falls below 352.
Additionally, prices will be supported by production, which fell from 110 Bcf to 109.2 Bcf. Any further cooling in Texas could cause wellhead freeze-offs, which would instantly remove another 1-2 Bcf/d from the market; also, terminals are operating at 18.5–19.2 Bcf/d. This is a powerful foundation for the price.
Special attention should be paid to the latest COT report data (as of January 6, published Friday, January 9): the market is in a state of extreme speculative imbalance, with 1,000,000 short positions. Speculators aggressively opened new shorts (+41k contracts) exactly when the price approached the $3.15–$3.18 level. A net short position of 100,000 contracts means that a massive amount of money is bet on a warm winter. GWDD to 359 (+15 over the weekend) is exactly the news that the bears feared most. Given that many entered shorts late Friday, a +4-6% gap on Monday will lead to automatic triggering of stop-losses. Speculators are trapped in record shorts at the very bottom. Monday's opening promises to be volatile; it will not just be growth, but panic closing of short positions.
Those who sold on Friday at $3.20, hoping for $3.00, will see a 359/360 forecast. They have no opportunity for a smooth exit. They will close at market price, buying gas and pushing the price higher. Hedge funds have accumulated -100,000 net short contracts. This is a powder keg. The price increase at the opening will force them to close shorts, which will create a domino effect.
Entry point 3.30 or enter on the first pullback after the gap. Stop Loss $3.20 Take Profit $3.50, $3.58
Idea cancellation: If the 12Z evening run (today) or the 00Z morning run (Monday) shows sharp warming and the GWDD number falls below 352.
Note
Weather shock: +23 GWDD over the weekend — this is the strongest bullish impulse of the season.Extremely bullish weather + low price + huge accumulated short. This is a classic configuration for a strong upward trend.
Long from the current price 3.20.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Хочешь хороших денег – умей выжидать
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.