Monday

Markets Fall Monday | Investing in Natural Gas

Post a Comment April 20, 2009 – 5:42 pm |   | Permalink |  Print This Post |

Markets have turned (finally), after 5-6 weeks of rallying hard. Even though we were confident we were topping or have topped, we were hoping for markets to rally first prior to opening more SHORTs as per our trade plan. Our Dow Jones target of 8137 was close to the top of this rally (~8160), our downside target is at least 7350 (50%). At the time of writing the Dow is down 2.9% (7900); the Dax is down 3.1% (4488) and FTSE is down the least as one would expect about 2% (3980). Discrepancy between FTSE and Dax is now 500 points. We feel this is a pullback before a multimonth rally and presents a buying opportunity. We look to buy into Google and General Electric (and even Citigroup for short term trading).

Natural Gas is down 4.4% - yes we are happy about this despite having a small holding in it (we passed our Emotional/Leverage Indicator ie if you are happy your positions are down then you are leveraging appropriately). Natural Gas May contract expires on the 28th April 2009. We expect it going down more heading towards expiry as markets continue its decline. At some point it should rally (hard) as shorters close out their positions. We will keep the May contract in our watchlist for now. A safer option would be to long Natural Gas ETFs.

Orders to open:

• EUR/AUD: 1.88 short mini
• AUD/USD: 0.68 long mini

Bought Citigroup $2.80 - 500 shares