Following on from yesterday’s diary discussion, I went into natural gas this morning. The market pulled back a little after I went in, on low volume, and is now running upwards.

This looks to me like quite a significant breakout. The downtrend in the market seems to have come to an end with a tight, flat trading range, from which the price has now broken. There is a story that hot weather and the hurricane season in the US will lead to rising gas prices, and it seems to be overcoming the bearish backdrop. This is the first decent upside breakout in natural gast this year. To help matters along, the speculative net short position is pretty close to a long-term high.

I wondered whether to wait for a pullback, but reasoned that if this was a significant breakout, the price could run away from me. I placed a wide stop, because that has been a good plan historically according to my market personality page — the stop is shown by a line on the stop loss page screenshot. Market personality was not very useful because I am betting here on a change of personality, from bear market to bull or wide-ranging flat market.

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