$10,000 Tuesday – Cashing In Last Week’s Natural Gas Trade

How many stock market newsletters make you $10,000 in 3 days?

Last Friday, we talked about hedges for a market correction and, as I do on occasion, I shared a trade idea from our Member Chat Room (and you can join right here) to short the Natural Gas Futures (/NGH4) saying:

In our Member Chat Room this morning,  we shorted Natural Gas Futures (/NGH4) at $6.25 and Oil Futures (/CLJ4) at $102.50 but those are day hedges.  We also shorted UNG (Natural Gas ETF) in Tuesday’s Live Futures Trading Workshop, so those are great hedges for day-trading and short-term covers.

I also tweeted that one out (follow me here), just to make sure no one missed it.  

Yesterday, we had the biggest single-day drop in Natural Gas in 5 YEARS and each one of those /NGH4 contracts made $10,000 at $5.25 while our UNG short position from Tuesday’s Live Trading Webcast (and we have another one today at 1pm EST) was cashed out in that same dip in an Alert Message I sent out to our Members at 2:51pm with a 67% gain in less than a week.  

This stuff isn’t an accident.  We spent a week discussing WHY we were going to go short on /NG, as well as how to time it (into the contract expiration) and yesterday afternoon, I said to our Members:

Interesting to see how high Nat gas will bounce into the close.  It’s like the end of trading places – where Eddie Murphy and Dan Aykroyd have to square up all their sells with buys. 

This morning we flipped long on the new contract(/NGJ4).  Today is still going to be choppy, but the point of this post isn’t to give you a Natural Gas Trading Seminar, rather to emphasize why it’s important to understand the FUNDAMENTALS of investing, so that you can take control of your trading and learn to “plan and act” – not “panic and react”.

I also made a strong call this morning, in another Alert (no, we don’t do them every day) to get back to cash, especially on short-term bullish positions.  This is something I mentioned doing into last week’s rally but, as you can see from Dave Fry’s SPY chart, yesterday’s low-volume pump and dump scheme reallly bothered me.