As I wrote about here and here, natural gas has showed a historical tendency to decline between June Trading Day #11 and July Trading Day #14 (6/15/15 through 7/21/15 this year).
As you can see in Figure 1, with one week left to go ETF ticker UNG and September Natural Gas futures are both slightly below their levels of 6/15, but has been advanced strongly in the last week, so things still hang very much in the balance. The ETF ticker UNG and September Natural Gas futures both tried to break out to the upside on 7/14 but then reversed back to the downside. As I write natural gas futures are once again trying to move to the upside however, in the early morning of 7/15. So the bottom line is that the end result for this particular seasonal trend this time around remains hanging very much in the balance.
Figure 1 – Ticker UNG during “Unfavorable” Period so far (Courtesy: AIQ TradingExpert)
Figure 2 – September Natural Gas futures during “Unfavorable” Period so far (Courtesy: ProfitSource by HUBB)
From a trading perspective (and for what it is worth):
*I wrote about a potential option trade using options on UNG here
*And as I wrote here I would have taken the money and run on that option trade a short while back. Yes, I understand that as the purveyor of this particular seasonal trend I should stick around to the bitter end and not take early profits and run away.
Sorry, it’s just my nature.
Jay Kaeppel
Dear Sir,
I am a fan of your writing, particularly about Natural Gas, you were right on almost all occasions i observed. Thanks for really meaningful analysis every time. But somehow this latest analysis of Natural Gas’s unfavorable period is not matching with the realities :(. I am quite stuck in shorts in NG. Please suggest.
Thanks for the comments. The “unfavorble” period for NG wasn’t much to write home about this time around, however, for the record the dates for this period were 6/15/15 (June Trading Day #11) and 7/21/15 (July Trading Day #14). So technically, the seasonally unfavorable period is over. The action this time around was a follows – September NG futures closed on 6/15 at 2.942 and closed at 7/21 at 2.894 for a small gain of $480 on a 1-lot short position. ETF ticker UNG dropped 1.1% from $14.03 to $13.87. If you are still short you are kind of on your own as the seasonally unfavorable period is now over. Jay