This report covers the week ending July 12, 2019.
Trading Positions
The market became overbought in the short term just as projected TDDs seem to have peaked and dry gas production was still very close to an all-time high. Even as all the other market variables are giving bullish signals (weather models, coal-to-gas switching, consumption, exports, etc.), the supply side is still very discouraging for the bulls. Therefore, the rallies are unlikely to be smooth and easy.
We have significantly reduced our long exposure yesterday (particularly in UGAZ) and decided to increase our short exposure