Ladies & Gentlemen, WE ARE IN THE MIDST OF A MASSIVE SLOWDOWN. U.S.'s MARCH CHINA IMPORT NUMBERS DROP -26.5% FROM THAT OF JANUARY.

Investors should take this as the indication that we are in the midst of a major slowdown in the U.S. economy. As recently reported by the U.S. Depart. Of Commerce the U.S. imports have dropped a whopping 26.5%!

(click to enlarge)

This is massive compared with normal rates of change usually experienced over this period.

(click to enlarge)

The driving factors from our analysis attributes this to many reason, but the two largest reasons being:

• U.S. manufacturing slowing, which in-turn is requiring less middle-process components from China.

• U.S. consumers and businesses are not confident in the U.S. economy, regardless of the efforts made by the U.S. Federal Reserve.

Accordingly, we would recommend that investors be careful of a large equity and commodity sell-off. These two areas have the largest chances of major selling. Especially those related to manufacturing, such as metals, natural gas, and import related industries.

Source:

www.census.gov/foreign-trade/balance/c5700.html

Disclosure: I am short [[UNG]], [[SPY]].

Additional disclosure: and many other select names/areas....

- - - -

Short posting, wheels up in 15.,

Disclosure: I am short [[UNG]].

(click to enlarge)

Many people thought I was crazy when I called the natural gas market a "bubble" over the last 8 weeks, and many people still think I'm crazy because I continue to call natural gas a "massive bubble" at $4.00.

I am here to tell you that natural gas should only be selling for $1.50-$2.00.

The first corroboration for this comes from a master in the energy markets, Mr. Pickens. Just this morning he stated " there is 4,000 Trillion natural gas in the U.S. and Canada which equates to a 125-130 year supply" (CNBC, Video, 05/15/2013).

The second point is that total natural gas rig count has dropped to 350 which is the "the lowest total since June 1995" coupled with the fact that the EIA expects total production to top last years by 1 % (Doan & Stubbe, Bloomberg, 05/10/2013, EIA Website).

The third reason is that total speculation on contracts in the natural gas markets represent between 900%-10,000% of what actually get delivered in any given month (CME, CFTC).

The fourth reason is that derivative products in options, swaps and ETF's distort the underlying market through volume enhancement (Theory, as volume increases while number of market players stays relatively stable then pressure is increased. [All equal to hype and investor craze]).

The fifth reason is that using the Five Year average or the Last Year average for comparative purposes is naïve, given that the EIA bases its calculations on an actual date-to-date comparison, which does not take into account calendar to orbital-space relationship (EIA Methodology, NASA Earth Orbit). (Such an example can be seen where in Ethiopia and their using the Alexandrian calendar today is actually the 7th day of 2005. So when it comes to our calendar for market purposes it makes a difference to compare exact orbital positions instead of dates on a calendar. For this reason a five year average may be off as much as months to a years. Understanding this the market would plummet.

These five reasons give rise to a real value for the massively plentiful resource in the range of $1.50-$2.00.

Let me say this again, natural gas is so plentiful and our technology in recovering is so advanced that natural gas real market value is only $1.50-$2.00.

This is my call, and I stand by it. I only ask that you rationalize these points, and then take them and digest them for yourself. When cool heads prevail, the market participants will understand that they are all dancing on the surface of a plane of glass and at any moment this glass will and can break.

Disclosure: I am short [[APC]], [[BBG]], [[BP]], [[BTU]], [[C]], [[CHK]], [[COG]], [[COP]], [[DVN]], [[ECA]], [[ELP]], [[EQT]], [[FST]], [[GDX]], [[GLD]], [[GS]], [[JPM]], [[KWK]], [[LNG]], [[MS]], [[NFX]], [[QEP]], [[RRC]], [[SLV]], [[SPY]], [[SRE]], [[SWN]], [[UNG]], [[UPL]], [[WPX]], [[XCO]], [[XEC]].

HERE IS A PASTE OF A REUTERS ARTICLE....INFORMATION IS PRICELESS, WHILE NATURAL GAS FAIR VALUE IS ONLY $3.20

2013'S GAS PRODUCTION TO EXCEED LAST YEARS BY 1%

-

http://www.reuters.com/article/2013/05/14/markets-nymex-natgas-idUSL2N0DV21N20130514

By Joe Silha
NEW YORK, May 14 (Reuters) - Front-month U.S. natural gas
futures edged higher on Tuesday for a second straight day,
backed by cool Northeast weather early this week that has lifted
demand despite milder forecasts for later this week and next
week.
Gas prices slid more than 11 percent in the previous three
weeks as moderating spring weather curbed heating loads but have
gained nearly 2 percent so far this week as temperatures cooled.
Chart traders agreed the market was oversold after a
three-week slide and due for a bounce, noting prices have tested
technical support in the $3.90 per mmBtu area several times over
the last week but so far have not settled below that level.
"Natural gas prices are attempting an upside breakout on
talk of cooler temperatures. However, without a significant
shift in the weather, we still see the fundamentals as bearish,
with pressure on the bulls to head for the exits over the next
month or so," Citi Futures analyst Tim Evans said in a report.
At 12:15 p.m. EDT (1615 GMT), front-month gas futures
on the New York Mercantile Exchange were up 5.4 cents, or 1.4
percent, at $3.979 per million British thermal units after
trading between $3.923 and $4.01.
The front contract hit a 21-month high of $4.444 two weeks
ago, then posted a five-week low of $3.883 last week.
Some traders noted that speculative investment funds may be
giving up on the recent bull run, at least temporarily. Last
week they trimmed their net long position in natural gas
futures, options and swaps for the first time in three months,
according to government data released on Friday.
Most traders, expecting milder weather to lead to more
above-average weekly inventory builds, see only limited upside
from here until hotter weather arrives and forces homeowners and
businesses to crank up air conditioners.
Commodity Weather Group said it expected U.S. temperatures
to mostly range from normal to slightly above normal for the
next two weeks, but no major heat was forecast for the period.

ANOTHER BIG INVENTORY BUILD EXPECTED
Data from the U.S. Energy Information Administration last
week showed that total domestic gas inventories rose by 88
billion cubic feet to 1.865 trillion cubic feet.
The weekly build was above the Reuters poll estimate of 83
bcf and well above the five-year average increase for that week
of 69 bcf, and initially pressured prices.
The gain was the fourth of the stock building season and
exceeded market expectations for the second straight week. It
trimmed the deficit versus the five-year average by 19 bcf, but
stocks are still 99 bcf, or 5 percent, below that benchmark.

That deficit is likely to shrink again in Thursday's EIA
report. Injection estimates range from 90 to 106 bcf, with most
in the mid-90s. Stocks rose 56 bcf during the same week last
year. The five-year average increase for that week is 83 bcf.

PRODUCTION CLIMBS DESPITE FEWER RIGS
Baker Hughes data on Friday showed the gas-directed
rig count fell last week by four to an 18-year low of 350.

Despite the steep decline in dry gas drilling, production
has not slowed much, if at all, from 2012's record highs.
The EIA last week raised its estimate for domestic natural
gas production in 2013, expecting output this year to be up
about 1 percent from last year. If realized, it would be the
third straight year of record production.

Disclosure: I am short [[UNG]].

Additional disclosure: natural gas

Based on news reports/comments coming out of Benposium (Bentek's Annual Conference)

- - - - - - - -

- According to Rick Allen, director at Bentek, over the last six years there was a 190% growth in well efficiency.

- "It took 20 days to drill a typical well in Fayetteville in 2007, while now it takes around seven days," Allen said.

- On average there was a 607% increase in initial production rates per rig per year since 2007

- - - - - - - -

From these early indications, we see Bentek focusing on an explanation of the technology that led to these improvements, while the bigger story is the vast number of producing wells and the improvement in recovery WHICH equates in massive oversupply for the marketplace.

Notably, (and as was mentioned in a different S.A. comment) the next five injections are set to average 100+/- , giving easy circumstances for above normal total production or the injection season.

- - - - - - - -

We stand with our position on much lower natural gas prices ahead.

Disclosure: I am short [[UNG]].

Additional disclosure: short the energy market

The natural gas bubble has started popping and the beginnings of this pop should send shivers down any natural gas traders back. The recent drop is set to continue further as regardless of this weeks EIA report, the injections coming are currently set up for four weeks of 100+ injections. This coupled with the EIA recent reporting that this years total injections will be 1% greater than last year's will most likely cause the gas markets to plummet and we calculate a 25% chance of seeing sub-$3 dollars over the next 45 days. Other charts calcs show a 53% chance of prices being between $3.00 and $3.40, while there is a 75% percent chance that we hit below $3.65 in the next two-three weeks.

Massive exodus of the natural gas sector is being caused by the excessive speculators creating all the hallmarks of the bubble and with record injections now coming, they are being yanked the other direction with self-inflictions and vividly this market is on toothpicks holding up a concrete foundation. The weight of the situation will take hold and the coming weeks sell-offs could be massive. It wouldn't be surprising if we see a $0.50 single day sell-off on bearish news. More news to come…

###

Disclosure: I am short [[UNG]].

Additional disclosure: short natural gas