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Short Natural Gas Trade 2013-01-14

I have entered into a short natural gas trade. The time frame is short term, a few days. I entered the trade at 11:42 this morning, my time, at a price of 3.40. 

The principles behind the trade are an MACD divergence on the 60 minute time frame.

There seems to be a lot of bullish sentiment for natural gas these days. We some people predicting "serious cold" for a couple of days here and there. We've also seen some pretty sharp drops in natural gas supply figures provided by the EIA over the past few weeks.

One of the reasons I used to stay away from natural gas was that the past couple of years I tried trading it based on the numbers and the weather. In my experience, this is extremely unreliable. I know trade this market primarily based on technical analysis. If the EIA numbers and cold forecasts align with the technical analysis, its good. But if the technical analysis is in direct contradiction with cold weather forecasts or the EIA numbers, in my experience, the technical analysis wins every time the natural gas market. Don't ask me why.

Let us observe a chart for February natural gas futures on the 60 minute chart.

short natural gas trade 60 minute time frame macd divergence

What we see here is prices encountering resistance at 3.40. Meanwhile, as prices poke upwards against the glass ceiling, MACD has made a very nice divergence. 

I have decided to make a short natural gas trade because of this situation. In case I'm wrong with my analysis, or in case of sudden market affecting events, I have placed a stop order to limit my potential exposure to loss.

In other markets

I'm still long gold from my Dec 28 trade. I am seeing a potential buy in the USDX on the 60 minute time frame, but I am not going to enter a trade in that market right now. I am still looking with a bullish eye towards sugar.

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posts listed chronologically below



2013-04-08 Short Natural Gas

2013-03-10 Dollar Index

2013-02-17 Crude Oil

2013-02-11 British Pound

2013-02-03 Gold & Updates

2013-01-21 Gold Trade

2013-01-14 Natural Gas

2013-01-14 Gold Update

2013-01-07 Sugar Trade

2013-01-04 Gold Update

2013-01-03 Natural Gas

2012-12-28 Gold Prices

2012-12-26 Natural Gas

2012-12-24 Updates

2012-12-12 Sugar Trade

2012-12-06 Dog Video

2012-12-06 Gold Re-entry

2012-12-05 Natural Gas Update

2012-12-04 Natural Gas

2012-11-29 Gold

2012-11-19 Updates

2012-11-06 Natural Gas

2012-11-01 Natural Gas

2012-10-28 Gold Futures

2012-10-23 Natural Gas

2012-10-22 Sugar, Re-entry

2012-10-18 Sugar

2012-10-17 USDX, Sugar, Gas

2012-10-15 Natural Gas Futures

2012-10-12 Natural Gas Update

2012-10-10 Natural Gas

2012-10-04 Sugar Exit

2012-10-01 Sugar Update

2012-09-25 Natural Gas, Sugar update

2012-09-20 Sugar

2012-09-20 Natural Gas

2012-09-12 Canadian Dollar

2012-09-11 USDX

2012-09-10 Natural Gas

2012-09-09 Natural Gas, DX, GC, SB

2012-09-05 Sugar Futures

2012-09-04 Canadian Dollar

2012-09-01 Gold, Dollar Index

2012-08-24 USDX, Sugar, Gold

2012-08-19 TRADE Sugar

2012-08-16 TRADE Sugar

2012-08-12 10yr T-Notes

2012-07-30 TRADE: AUD/USD

2012-07-23 TRADE: USDX

2012-07-18 TRADE: US Dollar Index

2012-07-17 TRADE: AUD/USD

2012-07-15 10 Year Treasuries

2012-07-06 Sugar Futures

2012-07-02 TRADE: Australian Dollar Futures

2012-06-27 TRADE: Sugar Futures

2012-06-25 TRADE: US Dollar

2012-06-22 TRADE: US Dollar

2012-06-21 TRADE: Gold, Sugar

2012-06-18 More on Gold

2012-06-12 Gold Update

2012-06-12 TRADE: Dollar Index

2012-06-11 TRADE: US Dollar

2012-06-07 TRADE: Gold

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