Here's the action, and before you ask, the only thing I know is the $5.75-5.80 line from 2010 is as good an overhead resistance point as I can think of so we're close.The market got to $5.737 before reversing and trading all the way down to $4.990.
Currently changing hands at $5.1830.
I shall now go throw up.
Here's MoneyBeat:
The ‘Widow Maker’ Proves Tricky for Natural-Gas Traders
Natural-gas trading patterns are predictable: Prices rise in the winter, when demand for gas-fueled indoor heating increases, and fall in the spring.Tomorrow we have the EIA's storage report.
But in a market famous for large swings based on changing weather forecasts, correctly predicting the extent of the winter rise and the spring retracement can fell traders or even entire funds.
Bets on the winter-spring transition tend to come down to predicting whether the price difference between the March and April natural-gas contracts will widen or narrow. A bet on a wider spread indicates an expectation that winter prices will be much higher than spring prices, because supplies will tighten amid strong heating demand. Prices for April futures are usually lower than March prices because there’s little natural-gas demand for heating and additional demand from power plants to power air conditioners hasn’t yet kicked in.
Simple enough. But the trade is known as the “widow maker,” because a bet can go bad with a change in the weather.
Wrong-way bets on winter price moves cut the values of funds managed by Copperwood Energy Trading Advisors LLC and Skylar Capital Advisers LLP by more than 10% last March. And the March-April spread isn’t the only trouble spot in the risky gas market: Wild swings in natural-gas prices led to the collapse of hedge fund Amaranth Advisors LLC in 2006, after the firm lost $6 billion....MORE
Oh joy.
From FinViz:
