There has been a great signal that NG futures will begin to descend ... The signal you ask--well, I closed my short position.
Closed it yesterday and today. I foolishly was married to it despite the screaming signs that the crowd was going to move it higher. I am contemplating buying the weekly 18 strike puts tomorrow for one last stab at it, but am just happy to be away from the table.
I seriously believe there is going to be a greater than expected build tomorrow, however, between now and report time UNG could be up another 50 cents. But, unless it's a real blow out, I don't think it will matter.
The NG producers are no different than OPEC, If they want a certain price, they will make it happen. Congrats to the shorts that switched positions one or more weeks ago.
As a short it bothered me to see the spot price up 12 cents in one day to 2.50 (today!) It bothered me that the UNG roll to the July month is only costing an extra 7 cents, whereas it use to cost 10-12 or more cents. It bothered me to see obvious signs of large players propping up the near future, which in turn moved the spot.
The only thing I think going for the shortside is the mild weather and possible mild summer. If the switch from coal to gas is already having an impact on demand, imagine if (or when) the mild weather goes away. The price of coal should create the top. But let's face it, the headlines are already changing from "OMFG storage is running out!" to "unprecedented utility demand and production cuts are freeing up storage!"
I wish you all the best, I may begin selling out of the money puts on UNG, or sit out completely, or as stated above take one last stab at being short by buying the 18strike puts before tomorrows report.
But like I said, me closing my short may have signaled the top! Best of luck, emailbot