Of the 39 nat gas stocks I began studying yesterday, 31 are in the green on an otherwise horrific morning. Sure, AAPL has battled back and is still trading above 260, but I didn't even filter out the natty gassers that were questionable or carried more oil in their inventory than I'd really like. But those 31 are still green.
REXX +6.2% to 11.91
KWK +5.5% to 12.80
GDP +5.6% to 14.77
HERO +4.8% to 3.06
ROSE +4.6% to 24.77
It goes on and on. I still prefer UNG for the time being, waiting for a better entry point as it trades near its intraday high (8.15). As an ETF, it will be more stable. However, some of these sub-5 natty gassers will probably have wicked swings for days or weeks to come. Really, do you think Obama will step to a podium and suddenly declare that clean energy does not include nat gas? Hell no.
FTK +4.0% to 1.54
MMR +3.8% to 10.64
RRC +3.1% to 52.64
A lot of these companies have frankly crappy fundamentals. I can accept that. The environment has been slanted against them politically until Obama finally uttered the word "embrace" regarding nat gas. But there are more than a few natty gassers that have HUGE debt and wildly overpaid executives (see yesterday's posts and charts). Those stocks will be the first to fall off the wagon in this run, though it could last for some time. It's like the gold rush and all those potential panhandlers breaking the speed limit (of 8 mph) to get from the Midwest to Californica. Yee haaw, brothers and sisters. Yee fucking haw.
I must overcome my natural tendency to duck and hide, and open a tiny position or two. Nat gas simply showing too much strength. We'll have a better idea by lunchtime — will the market manipulators take their profits and eat a big, fat pastrami sandwich for an hour? — and again by the close. If the market sells off like mad into the close, where will nat gas go? It could hold ground, or sell off in anticipation of another ride up next week. The MMs will play that game until your balls are broken. I'd rather play the game along with them than overpay and get caught holding the bag.
Bismarck, N.D., I see you!
