on achievable HNU gain and buying HNDTgar- re past action in HOU
Per his post( friday ) that it took time for the oil contango to shrink and it was possible to
not have HOU rise
-Hopefully Tgar did better with timing than to make a pittance with HOU
See wtic and HOU charts at stockcharts
If one takes seasonal time for entering oil
We see it is end of Feb ( a little later than the 35 low in Dec)
and oil was about 37 in late Feb and hnu dipped under 5 to 4's
charts suggest one might have bought HNU say at 4.90 ish late Feb
(yes a bit of time AFTER the Dec low and turn in oil and then shrinkage in Contango)
Then oil ran to 73 ish early June with a peak at 11.05 ish for HOU
so say you sold HOU at 10.50
So you could have made in the order of ( say and only ) 115% on HOU ( 4.90 to 10.50 )
( or a bit more % than oil itself went up)
There were also some dips in there so it shows one should not hold right thru for 5 months
ie Sell and rebuy on dips
SO any plans to ever hold the Beta for even 6 months is foolhardy
( for a futures based product and in a commoditiy that is seasonal
( again 6 mo patterns )
................................
now on to HNU
So you can say the best you can do with HNU is 150% from the bottom
if you catch it ( but then wide Contango hurts you )
So anticipate say 100ish % likely achievable max on HNU
And out by Dec 1st
and then a re-entry and out by Feb say for another 15%
So most of you who averaged down may breakeven ( likely at best)( and not make anything )
And likely only when/if contango moderates
as Tgar indicates ( eg Nov N G future needs to slip to say 3.75 first )
Ie if you buy right at bottom and before some sideways drift
( which can give time for Contango to shrink) you don't make as much
Tgar suggests you wait for some sideways time
Just shows it is always tough with futures and somewhat stacked against you
SO bottom line summary of Tgar's details is : you can enter TOO EARLY
( you need to give a chance for Contango to narrower)
Humm all that work to make a possible 100% on WTIC or N G future
And is more info to prove : averaging down doesn't help much.
You can't be EARLY !
Timing is crucial -enter a little AFTER the turn , not likely before
Might as well just play a stock or a 1x commodity or consider a swing on a call option
on a stock or index for 100%
Or try your 2 day swing trade on other commodity Betas
Then watch for N G contango to shrink and enter HNU ( ie could be end Sept into Oct )
And seems to me the OCt price is the continuous contract on $natgas Gallery view
and we can test 2.90 (from today's 3.24 ish ) on that And then down hard
at end of Sept ( "no bid")
I had suggested the other day to wait at least 2 weeks for HNU and now I think longer
( see below)
the unusual factor with such a high fill level completed ( this year )
seems to be that there has been no fall off in injection rate with the
hedged sales/deliveries by the majors
And there may not be till near the end in Oct ( as mentioned in the media )
Seems like buying HND , for a day or 2 , each week for next 8 weeks
while approaching end of injection season is a play
NG spot can dive in Oct ( "no bid" ) when storage fills and and then HNU slides
and HND rises
An unusual change in industrial demand or major supply disaster in 6 weeks ( or unlikely
falloff in injection ) would seem to be only reason we would get a turn up before mid Oct
And if HNU goes to 2.45 ish , Horizon hopefully will rush to get a rollback done
It will be more attractive ( for me ) to buy / trade with the lower commission per share
( say late Sept - early Oct ? )
( In early July I had thought/suggested Labour day was the seasonal buy time but this year
it is likely unusually delayed a bit later
( As I read Fridays headers following my drafting this and ready to post ,
there seems some similar thinking?)
While in the long term certainly NG will be higher but it can still be "weak for weeks"
Comments? Seems what's going to happen . Important to focus/discuss
Hummm Norm Levine on Market Call thinks same way in general - no ( industrial) DEMAND = wait on t:GAS
Tempting to buy/trade HND by Wed on weakness ?
( why SHOULDN'T $natgas dip on Thursday? )
Dave King is thinking
ALSo waiting to see if $WTIC climbs to 75-76 soon , to consider HOD
Humm Tues early market for NG is down so could use another pop in NG to then buy HND
U