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October 27th, 2009
Technical observations of

Time to Let the Air Out of the Nat Gas Balloon

The natural gas price has doubled since the beginning of September and is entering an optimum time frame for a seasonal high. In most years the price tops between October 25th and November 5th, turns lower through November, bounces in December and then trends lower into a January bottom.

The two high inventory years such as this that saw prices appreciably higher after mid November were the prolonged hurricane season in 1995 and severe winter of 2002. In the other years prices saw an initial decline of 22% to 36% through November. In addition to futures contracts, there are ETFs and/or options available on the following: UNG, GAS.TO and HND.TO.

For future reference; years with low inventories (circled in red) generally see a high in December.

October 27th, 2009

The opinions in this report are solely those of the author. The information herein was obtained from various sources; however we do not guarantee its accuracy or completeness. This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Neither the information nor any opinion expressed constitutes an offer to buy or sell any securities or options or futures contracts. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report. In addition, investors in securities such as ADRs, whose values are influenced by the currency of the underlying security, effectively assume currency risk. Moreover, from time to time, members of the Institutional Advisors team may be long or short positions discussed in our publications.

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