January 27, 2010
Have courage and take this opportunity to push back and lean on the short sellers, who may be manipulating the Natural Gas market.
They have limited leverage capability, unlike several years ago, as their keepers, the prime brokers have either gone bankrupt or cut their leverage significantly. They are much weaker than investors might otherwise think, and can't afford the significant marked to market losses if their short positions start losing money.
The extreme weather starting this week, natural gas storage deficit, and demand are wind at the fundamental natural gas buyers back.
Short sellers always capitulate, when the ratio of buy orders overtakes their artificial sell orders on the market open and close. They know when to cover and either get out, or become a buyer especially when the market fundamentals move against them, which they now have on a substantial basis.
The short sellers have manipulated the natural gas prices down to very attractive levels, just before the extreme weather hits this week. Being short natural gas at this point in the winter cycle is high risk, and natural gas volatility will overtake the short sellers very quickly for the above mentioned reasons.
For further reference see following analysis:
"Natural Gas: Extreme Weather Update"
"Natural Gas and Oil: Thriving on Chaos"