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H. T. Love's  Instablog

H. T. Love
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Spent over 30 years in computer systems work, many different functions. Owned my own business for awhile. Got tired of it (managing employees is not my baliwick) and stopped doing it professionally. Did other things, off and on, for some more years and finally bumped into this investing/trading... More
  • Some one-off stuff for use in comments I might post. 6 comments
    Jun 20, 2009 1:37 PM

    10/28/2009: A couple charts for doubleguns in reply to a comment he posted which I answered.

    8/28/2008-1/28/2009 SPY Daily Chart
    2/25/2009-10/28/2009 Daily Spy
    10/8/2009: A couple charts for an interim response to a question Freya posted in this comment asking what's next for NG. Of course, I don't know but I'm working on some extrapolations (made more difficult because EIA reports certain historical data monthly and weekly reports are what moves the market).

    In both of these charts, note that the average weekly storage change is calculated by taking the monthly reported storage change and dividing by 4.345. This is as close as I can come to generating numbers that may allow some relevance to the actual net injections and withdrawals reported in the EIA weekly storage report and summary report.

    I'm hoping to use these numbers in conjunction with various producing wells data, reported rigs count changes, considerations of the economy and predicted weather, etc. to make a SWAG (Scientific Wild-Assed Guess) of what near-term future changes might look like. The goal, of course, it to try and make gross predictions of price changes in NG and various derivatives.

    I consider this to be not an easy task and I don't know if I will ever succeed to the degree that I would like. But half the fun is in the effort.

    Anyway, without any additional extrapolations at the moment, here are two charts that you may find useful for your own assessment.

    I do have some extrapolations using other factors, but they are not ready yet.

    (Click to enlarge)

    Oct-Sep Calculated Weekly Average Inject/Withdraw 5 Yr Groups

    (Click to enlarge)
    Oct-Sep Calculated Average Weekly Inject/Withdraw 2005-2010 By Year


    9/27/2009: Added these charts for a question to Suzanne H. in the Iinstablog "Top may be in, waiting on confirmation". The trend line she shows touches the same points as this one, but the slope is different. There must be some distortion in either my chart from Power ETrade Pro or the Stockcharts.com chart. "compression" left of the July 8th-13th on the Stockcharts.com chart (or expansion in the same area on the Power ETrade Pro chart) could account for this or expansion to the right of that area on the Stockcharts.com chart (or compression in that same area on the Power ETrade Pro chart) could account for the difference.

    The most concerning demonstration of the incongruence is the failure of the trend line on the Power ETrade Pro to "touch" the Sep. 1st-3rd range and , consequently, we have a discrepancy in the projected intersection with the $1039.74 support. This now becomes quite concerning.

    (Click to enlarge)
    SPX 200 Day Chart 2009/09/25

    As a first attempt to determine where the problem lies, I did a quick download of historical price data from my ETrade Quotes and Research Screen - Price History. I then did a rough slope calculation and refined it until I saw something familiar. Based on the below chart, I believe the charts from Power ETrade Pro are correct. If so, the trend is not broken until $1001 is penetrated (with a projected low of $998.14).

    I "stretched" the chart to allow a little finer resolution, visually, so don't worry that the visual slope doesn't match - it did before I "stretched" the graph. (Click to enlarge).
    SPX Trend Line Project on Calculated Slope: 3/16 - 9/25 2009
    9/13: Added this chart for a reply to One Eye's comment here.
    Ivan vs. SPY 2009/9/11 200 Day Chart
    9/5: Added this chart of EIA reported LNG imports for a reply to a comment from  Aricool.

    1999 - June 2009 LNG Imports per EIA
    8/30: Added a SPY chart for reply to a comment by Albertarocks in an article about reducing volume on the current rally. The vertical red lin about 2/3rds to the left is Feb 10, 2009. It had volume of 536.06MM trades. Notice that volume has been pretty consistently trending down as price trends upward. By traditional thought, what conclusion would you draw? Volume on 8/28 was only 147.01MM trades and the low volume was July 17 - 138.53MM trades.

    Now consider the HFT, GS not making profit on 3 days in the last quarter and making $100MM+ on 86% (I not sure, going from memory but it was somewhere up in this stratospheric range) of the trading days, "Flash Orders" Plunge Protection Team, Fed expansion of "other" assets, ...

    Click to enlarge and let's hope scrolling is working consistently on SA now.

    SPY 200 Day 8/28/2009


    8/23: Added rig chart.
    Chart of Baker-Hughes Month-End NG Rig Counts
    8/22: Just realized that folks wouldn't realize why there's such a big jump in the consumption charts. Starting in the '90s, EIA began tracking Lease/Plant fuel, which wasn't previously tracked. Then in 1997, they added vehicle fuel usage and in 2001 started tracking Pipeline/Distribution, industrial consumption and electrical power usage. So the spike in usage was not that dramatic probably, but a result of more complete reporting.

    8/13: added consumption charts for a reply to William M. Wright's "UNG Hasn't Changed the Laws of Natural Gas Supply and Demand".
    Natural Gas Monthly Average Consumption by Decade

    8/8: added this chart for reply to this comment by Responsibility in an article by Trader Mark , "Why Are Natural Gas Producers Expanding Production So Aggressively?".

    NG Monthly Gas Price Changes
    7/30: added these two charts for a reply to a comment by CoastalTrader in "A Summary of UNG for New Investors and Traders".

    180 Day UNG Chart with Roll and Contract Expirations

    UNG vs NG Daily 2009/07/02

    7/15: Some early versions of charts I'm developing. Notice that I've rearranged so that October is first in a series and September is last. I felt that visually this would be more conducive to seeing the trends.

    Recently (that is, the last 20 years or so) September shows the earliest average uptrend. But October has been consistently higher, throughout the whole history, and starts the seasonal uptrend more reliably. With this year's injection levels, and consumption being what it is due to the economy, September may not behave as it has in the recent (20 years) past.

    NOAA predicting normal and slightly higher temperatures for the middle 50% (vertically) of the U.S. this winter. If accurate, the trend may start later. October seems a more reliable entry point for short-term (3-month) gain.

    The monthly prices for 2008 should be discounted as that was in the environment when all commodities rocketed through the roof, oil hit $147 and everyone thought the old oil/NG price ratios (anywhere from 6:1 to 12.5:1, depending on time-frame and who you read) held. As of this year the ratio is broken and stands around 18:1 or 19:1 depending on which time-frame you check. Oil is currently trending down, but the dollar is weakening in pre-market so it might reverse. Just too many factors to hazard a SWAG (Scientific Wild-Assed Guess).

    One thing to note: the seasonal price trend seems to have a bias to more often start in September, rather than waiting for October as it had in the past. Hard to judge this as this was in a period of high activity in home-building, increasing use in drayage vehicles, metro transit, shuttle services, etc. With economy as it is, can't judge the reliability of this change.

    Click the charts to enlarge them.

    EIA Reported Monthly Average NG Prices by Decade

    6/26: SA article mentioning the new NG ETF again. seekingalpha.com/article/145559-new-natural-gas-etf-could-help-battle-contango. Still need to find the first one I saw.

    6/22: Found LOLCapitalist CFA's "WTI/Henry Hub Ratio: No Big Thing" blog entry filling in a nice piece of the oil/gas ratio "traditional wisdom". Let's reference this when we discuss this in the future.

     6/19: These two charts are for AndrewBaker Reply.

    2/13-6/19 Chart for Reply to AndrewBakerComment

    Note the trading ranges below.

    11/12-6/19 UNG ranges for AndrewBaker Reply


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Comments (6)
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  • one eye
    , contributor
    Comments (647) | Send Message
     
    When I was commenting on your Article, I thought I was in the Instablog. I hadn't realized That it was an Actual Article.

     

    I was tracking down OG at the time. Mea Culpa.

     

    Life is Hard and then, you die.
    26 Jun 2009, 12:05 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    Author’s reply » No problem that I know of.

     

    HTL

     

    On Jun 26 12:05 AM one eye wrote:

     

    > When I was commenting on your Article, I thought I was in the Instablog.
    > I hadn't realized That it was an Actual Article.
    >
    > I was tracking down OG at the time. Mea Culpa.
    >
    > Life is Hard and then, you die.
    26 Jun 2009, 12:04 PM Reply Like
  • one eye
    , contributor
    Comments (647) | Send Message
     
    mea culpa, anyway.

     

    I take it you don't know who Lovecraft was.
    27 Jun 2009, 11:38 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    Author’s reply » No, but it's on my list of more things to invetigate and learn.

     

    HTL

     

    On Jun 27 11:38 AM one eye wrote:

     

    > mea culpa, anyway.
    >
    > I take it you don't know who Lovecraft was.
    27 Jun 2009, 09:27 PM Reply Like
  • one eye
    , contributor
    Comments (647) | Send Message
     
    H.P. Lovecraft was a Horror writer before the current breed came out. Even today an occasional movie will come out based on his works.

     

    If you saw Hellboy, that tentacled thingie that was trying get back in could have easily fit the bill from his works which had pictures.

     

    One note on NG demand in 2009 vs 2008/2007, Food prices were skyrocketing and Nitrogen Fertilizer sales were booming (nat gas was the feedstock).

     

    But the downturn really began with (my opinion) Home foreclosures. Most of the New Homes this decade were gas heated/cooled.

     

    Food and homes, when their engines restart, demand will increase significantly. Meanwhile, even a small oil Company like McMoran is curtailing NG output from existing production. Its a valuable asset, why waste it.
    14 Sep 2009, 04:02 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    Author’s reply » On Sep 14 04:02 AM one eye wrote:

     

    > H.P. Lovecraft was a Horror writer before the current breed came
    > out. Even today an occasional movie will come out based on his works.
    >
    >
    > If you saw Hellboy, that tentacled thingie that was trying get back
    > in could have easily fit the bill from his works which had pictures.

     

    I don't usually like those types of movies, but I really liked that one. I gues it the humor they injected into the character and Ron Perlman(sp?) did a *great job.

     

    I've still not gotten to any of that stuff. When I get into a learning mode, a *lot* of other activities suffer for a while. Following up on those things you mentioned are part of the current victim basket. But none get forgotten.

     

    >
    >
    > One note on NG demand in 2009 vs 2008/2007, Food prices were skyrocketing
    > and Nitrogen Fertilizer sales were booming (nat gas was the feedstock).

     

    I recall that. There was a *ton* of chatter about all the commodities, esp. POT, MOS, ... and everything else that warps time/space.

     

    >
    >
    > But the downturn really began with (my opinion) Home foreclosures.
    > Most of the New Homes this decade were gas heated/cooled.
    >
    > Food and homes, when their engines restart, demand will increase
    > significantly. Meanwhile, even a small oil Company like McMoran is
    > curtailing NG output from existing production. Its a valuable asset,
    > why waste it.

     

    I think your opinion about the homes may be right. Just think - not only does the home heating stop, electricity demand goes down (around 28% usage for generation if I remember), eating habits probably change to. When ytou're out of your home, you'll feel really poor and stop eating as much and change what you do eat I guess.

     

    HardToLove
    14 Sep 2009, 07:15 AM Reply Like
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