1-19-2012: Natural Gas lost 25% in the last week. As we mentioned a few days ago, the Natural Gas is our trade of the week.
However, the Natural Gas might have moved too much. When markets get this oversold, I tend to expect a pullback in prices. You can judge an oversold market by using Bollinger Bands. When markets hit a 3 Standard Deviation Bollinger band, markets are far away from normal prices.
The gas moved 25% in just a few days, so the Natural Gas is extremely close to the 3rd standard deviation band. We are going to remain with the trend, but be aware this trade could reverse very quickly.
Related posts:
Michael Sankowski spends a lot of his time applying quantitative mathematics to financial markets. When he's not playing the guitar, he has been a professional trader for 20 years. He's traded billions of dollars on four continents and is a well-known financial writer. He's a CFA, CAIA, and has created patented Futures products. He's here to help you make more money (and especially not lose your money).
I am new to this. What is the Trading Symbol for Natural Gas?
NG is the futures symbol for the big natural gas contract at the CME. QG is the micro sized contract at the CME.
If you go to barchart.com, just type “NG*” into the search bar (it’s on the left) and it will pull up a list of contracts. Select the one with the most volume, and then expand the chart. I choose “daily nearest” for a good view of what’s happening.
The Natural Gas is down 2% today. We’ll see how this pans out, but this has been a monster trade.