Having been a participant in the “widowmaker trade” allow me to introduce my readers to it with a little background into what makes it work.
In 2021, it was the “oh my God we don’t have enough pipelines” narrative.
In 2022, it was the “Russia’s cutting off the gas and Europe is going to freeze to death because global warming created a nightmare of Arctic weather this winter!” narrative.
In 2023, it was the “solar and wind is replacing fossil fuels” narrative.
Of course, I’m talking about natural gas.
I’ve lost a little of my personal gains on this years ago and it was a nightmare. I listened to the narrative, looked at what I thought was solid technical analysis, and ending up selling at a huge loss on an un-hedged bet for a potentially huge gain.
Yeah, I’m a dumbass.
But these past few years has created more members of the “natty gas up the ass” club as this chart so vividly demonstrates:
Folks, if this drops below $1.75 that’s a major deflationary warning as it means demand for electricity is dropping domestically and manufacturing is telegraphing something worse than “no landing” or “soft landing.” Pay attention because that bitch with the sledgehammer might aim for something more tender than your ankles and fire away at something between your legs boys.