August 8, 2013 DGAZ had an intraday high of $20.52. DGAZ is now down 68% which doesn't mean anything, supply and demand means everything. DGAZ could be down 80% before it turns upward for any meaningful length of time. I started a short position this morning, I'll add to it if NG continues upward which is likely but, I believe by June or July a review of this move should be seen as decent. Just my move for today. Good fortune to all.
IMHO I wouldn't short natural gas there are just to many things going against it. The next two storage reports have the potential of being record setters. Even if the weather gets relatively mild this current draw down will keep prices high. In pjm markets they are not letting NG generators burn gas due to supply constraints. Of course this will end but doesn't mean NG will come down significantly. I don't see NG producers running in to open up a bunch more wells because they were burnt on this in the recent past. Even if they do it will take a little time. EIA does report NG average price for 2014 should be in the $4.47 mbtu range. Remember in 2008 NG peaked to $14 mbtu's before it tanked. I would watch for any kind of pullback and buy NG next week. The other thing I wouldn't do is buy DGAZ or UGAZ and think of holding it long term. If you do see a spike like 2008 in which conditions favor DGAZ will become worthless. Of course a $1 drop in NG would lead to about a 60% loss in ugaz. Like all these inverse instruments it is a huge gamble, you have to get lucky and pick right. IMHO I just don't thing dgaz is the right move now, even though it is down over 40% in the last 4 days.(ouch)
Sentiment: Strong Buy
makes sense to me, it is all about risk balance between ugaz and dgaz.
with dgaz at a price of 4.x, it is worth the risk of losing more to 3*x, in order to catch a reward of 12.x, say in 3 months
I started mine this but only added a 1/3 of what I plan to invest. If NG continues pushing up then my next buy on D is @ 5.25 & 5.00. If it don't get there then I stay with what I got into next week. There are mixed forecasts after next Wed. some say warmer some colder. IMO this is a shorting scenario we may not see for awhile if you have patience to play it through. I have had good gains on both U and D this winter so I'm hoping this will be the grand finale. GLTA
Just want to thank the guys in this thread for the discussion..... slowly but surely I've leaned some about D &UGAZ.... the discussion has been both informative and civil... it may be solely because of the bull run but you have help one make some cash
I'm curious. Why do you guys think there will be a fundamental change here? Technical will always allow a short play but it seems like you are calling a top. I now see sub 38 degree temps in northeast though mid Feb. This weeks and next weeks draw will be larger than we are expecting. Maybe both 250 plus. Next week may be record setting - again. Looking at the draws we may be below 1.0 level or at least challenge it.
Also March is still trading 4.75. If this pol so 5 plus then we are just getting started.