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NG 2/2/26-

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Started by WxFollower - Feb. 2, 2026, 1:18 a.m.

I hope MM doesn’t mind, but partially in honor of Ground Hog Day, I think it’s time for a new thread. I probably should have started it on Feb 1st.

Happy Ground Hog Day!

Mike,

The Desk has an average guess way up at -370! Median is -372! I believe this would be a record?

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Re: NG 2/2/26-

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By metmike - Feb. 2, 2026, 1:49 a.m.

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Thanks, Larry!

Happy Groundhog Day!

Previous link:

NG 1/18/26

67 responses |

Started by metmike - Jan. 18, 2026, 4:47 p.m.

https://www.marketforum.com/forum/topic/117293/

+++++++++++++++

I'm adding the last several posts and link.

Re: Re: Re: NG 1/18/26

By metmike - Jan. 30, 2026, 5:26 p.m.

Weeks 3 and 4. More cold:

Seasonally, we've past the climatological mid point of Winter and coldest time of year ON AVERAGE. February looks to continue cold compared to average but probably not as cold as what we just experienced.

https://www.cpc.ncep.noaa.gov/products/predictions/WK34/

Week 3-4 Outlooks - Temperature Probability

+++++++++++++++++

These were the 7 day temperatures for next Thursday's EIA report.

The coldest color bar on the anomaly map(2nd one) is -16 even though this extreme cold had -18 and -20 deg. F isotherms that were colder than the coldest color bar.

Since this was also just past our coldest time of year and the cold impact some high population density regions, the EIA drawdown number next week will be massive.

https://www.cpc.ncep.noaa.gov/products/tanal/temp_analyses.php

Compare that to temperatures from yesterday's report (below) that featured a -242 Bcf draw down.

Will the EIA next Thursday be more than -300 Bcf? What do you think Larry? How many have been that big before?

++++++++++++++++++

The 12z European Ensemble model (purple/left) had -6 HDDs compared to the previous 0z run, which caused a small drop but NG was on a tear higher today because of the cold February forecast and the fact that March is priced pretty low vs the February that just expired/went off the board.

Next weeks EIA storage number will be a massive draw down.

By metmike - Jan. 31, 2026, 4:12 p.m.

Holy Cow! This last 12z GEFS (purple/left) was incredibly milder in week 2.

The European Ensemble was also milder but not by this magnitude. The NG price was +$5,000/contract and closed on the highs on Friday suggesting a gap higher open on Sunday Night but this change in the weather suggests a MUCH LOWER open..........if it holds.

+++++++++++++++++++

8pm: The last 18z model in purple below, took back some of the warm up(12z run now in yellow/left) but is still MILDER than all the previous runs before that:

+++++++++++++++=

NG 1/18/26

By metmike - Feb. 1, 2026, 5:16 p.m.

SHARPLY lower open!

4:55pm: HUGELY lower open!

++++++++++++++++

Re: NG 1/18/26

By metmike - Feb. 1, 2026, 6:12 p.m.

Even though we were +$5,000/contract higher on Friday, our gap today was a DOWNSIDE gap lower!!!

$6,000/contract lower on the open. The time to short was Saturday, when the models turned much milder............but the markets were closed.

I missed the open because it opened way lower than my selling price. In this sort of market, selling on Friday was too risky.

https://tradingeconomics.com/commodity/natural-gas

Top RED line was the close on Friday, +5,000/contract.

Bottom line was the open Sunday, BELOW the low on Friday and a GAP LOWER -$6,000/contract. I've never seen this happen before in 34 years of trading!

On Friday, front month March was at a premium of $3,500+ to the April.

Now at just +$700 vs the April. Of course this is overdone and we should get some sort of bounce back.

+++++++++++++++

The heating oil market below, actually didn't open that much lower(no gap) red line. Traders that sold that market on the open were able to get more bang for their buck because the NG gap so incredibly low on the open. NG is a much more sensitive weather market by a mile but in this case the delayed reaction by heating oil would have been the way to go. No way would I have been able to know this before the open.

In fact, my trading program would not even show prices the first 5 minutes, other than bids/offers. Not sure if it was overwhelmed or what.

https://tradingeconomics.com/commodity/heating-oil

Re: Re: NG 1/18/26

By metmike - Feb. 1, 2026, 7:17 p.m.

1. This was the last 12z European Ensemble model on Sunday(purple/left). HDDs in week 2 are now BELOW average(much milder temps)

2. This was the last 12z EE model on Friday. It was -6 HDDs BEARISH but the market completely ignored it after a small blip down. I had a selling set up triggered by that milder run and would have been run over by the bulls stampeding upwards Friday afternoon if short. This was actually in the early stage of the models turning milder which amplified over the weekend.

Re: Re: Re: Re: NG 1/18/26

The 12z European Ensemble model (purple/left) had -6 HDDs compared to the previous 0z run,

Re: Re: Re: NG 1/18/26

By metmike - Feb. 1, 2026, 10:51 p.m.

1. Top line was Friday's close = +$5,000/contract

2. 2nd line was Friday's low

3. 3rd line was Sunday's open and high, -$6,000/contract. The space between the 2nd and 3rd line was/is a downside break away gap.

After immediately spiking to -$7,200/contract shortly after the open, we fought back up close to the open, testing the bottom of the gap/high and have fallen back close to mid range as I type.

https://tradingeconomics.com/commodity/natural-gas

Re: NG 1/18/26

By WxFollower - Feb. 2, 2026, 1:08 a.m.

Thanks, Mike.

I wonder if in addition to the Sun 12Z EE having a whopping 24 fewer HDD for 2/8-13 vs the Fri 12Z run if the warmer Sun Euro Weeklies week 3 (for 2/16-22) vs what Fri’s showed was an additional significant factor.

———

Edit at 1:20: I hope MM doesn’t mind but I started a new NG thread.

Re: Re: NG 1/18/26

By metmike - Feb. 2, 2026, 1:20 a.m.

Yes, Larry that probably contributed a bit too.

Re: Re: NG 2/2/26-

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By metmike - Feb. 2, 2026, 1:52 a.m.

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This last 0z GEFS was another -10 HDDs(purple/left) compared to the previous 18z run. As a result, NG tested its lows for the session:

Re: Re: Re: NG 2/2/26-

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By tjc - Feb. 2, 2026, 9:07 a.m.

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Weather Gentlemen

Was there 'perhaps' some 'tell' in market behavior on Friday that would have alerted 'one' to buy a PUT?

(Much like the weather rallies in Beans that ALWAYS top on the Friday of the three day July Fourth weekend?) (Mike and I know that pain!)

I have extremely little trading experience in NGas, but I think it might be prosperous to analyze the TOPPING MECHANISMS of recent metals, ngas, beef explosive TOPS, and in the past minn wheat, beans, etc to determine IF there is a 'tell'. Would assume high RSI, %R, etc technicals, but must be something else in the BEHAVIOR.

Your thoughts?

Re: Re: Re: Re: NG 2/2/26-

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By metmike - Feb. 2, 2026, 10:49 a.m.

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Was there 'perhaps' some 'tell' in market behavior on Friday that would have alerted 'one' to buy a PUT?

Thanks for the good question, tjc!

The market was a shorting set up for me, when the extreme cold pattern let up as it always is after extreme weather shifts to the opposite. I almost sold a couple of times on a less cold model Thursday and Friday and at best could have captured a small, very temporary drop.

On Friday afternoon, as shown above the European Ensemble model and the Canadian model both came out a bit LESS bullish but the market bull kept stampeding and would have trampled me if short.

The longer range forecast thru Feb was still COLD, so I assumed the market was trading that as the #1 priority. In retrospect, it might have been impacted by the upcoming weekend Winter Storm along the East Coast too.

Also the front month had just expired $30,000/contract higher than the new front month, March and I was wondering if this could just be the March catching up.

Regardless, the March NG on Friday closed +$5,000/contract higher and close to the highs, about as bullish as it get's on a price charts and for traders using charts to predict what's coming next, suggesting a potential gap higher to start this week.

But the only reason that I trade NG is because it's a weather market. At this time of year, the weather forecast TRUMPS everything else. On Saturday, you can see from my post above the models made one of the biggest BEARISH(LESS COLD) changes to the forecast that I can remember.

Could that have been anticipated?

Keep in mind, thru much of January, the models have UNDER predicted the cold and this made it more likely that the weekend updates were much more likely to get COLDER and NOT MILDER.

But that's how it is in the world of weather forecasting and why all my huge, 6 figure losses (in the past when I traded huge size) were from being long over a weekend, when the weather pattern changed and I couldn't get out.

In this case, the biggest changes happened early Saturday and nobody could get out.........OR IN for me and you.

There are 7 days in a week. 6 of them have trading. M-Thu, 4 of those days have trading almost round the clock and are the best for trading weather. Friday's have trading thru the daytime. Sunday's have trading AFTER the daytime.

The only day with 0 trading is Saturday. Every huge loss that I ever took came when the weather models changed EARLY SATURDAY. 100% of them. The reason for this is that it maximizes the time elapsed AFTER the weather pattern change while the market is still closed which amplifies the magnitude of the move when the market opens again and needs for the price to catch up to the weather.

For instance, a weather model change on Sunday morning, might mean less than 12 hours until traders have to react and there is less certainty in the solutions. However, a weather model PATTERN CHANGE on Saturday morning, means there will be numerous additional model runs. Not only can they confirm the PATTERN CHANGE but in cases like this, as the pattern change get's CLOSER the models catching on usually AMPLIFY the change and maximize the difference in the weather forecast between when the market closed on Friday and when it opens again on Sunday.

That's exactly what happened this past weekend. The weather forecast/models suddenly got MUCH LESS COLD early on Saturday and built on that idea the rest of the weekend. By Sunday afternoon, every ng weather trader on the planet knew it and didn't want to be long. The complete opposite mentality of traders on Friday.

joj mentioned a phrase that a really sharp, grain floor trader mentioned to him decades ago. "buy wet, sell dry". This would have worked this time but the thing is that very often, people have convenient memories about stuff like this (not Joj). They remember weekends like this or when they got their clocks cleaned, like me when I was long a very bullish pattern over a weekend when the weather models turned very bearish.

What "buy wet, sell dry" means is that the market quickly dials in the bearish or bullish weather forecast and is very vulnerable for a move in the opposite direction if the weather maps change...........which they often do.

Regardless of that, the MAJORITY of times, the trend is your friend and weather patterns last a long enough time to cause that. The exceptions are when the weather patterns change from 1 extreme to something much less extreme or even to the opposite.

Re: Re: Re: Re: Re: NG 2/2/26-

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By metmike - Feb. 2, 2026, 1:17 p.m.

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Historic day for natural gas!!

Now down over $11,000/contract!!! The graph below only goes back to last Wednesday because that's when the March contract became the new front month being graphed.

https://tradingeconomics.com/commodity/natural-gas

Re: Re: Re: Re: Re: Re: NG 2/2/26-

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By metmike - Feb. 2, 2026, 1:38 p.m.

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These weather indicators really tell the story:

The extremely negative (very cold) ----AO goes to positive.

The negative (cold) NAO goes to neutral.

The positive (cold) PNA goes to neutral.

https://www.psl.noaa.gov/map/images/ens/ens.html#nh

NCEP Ensemble t = 360 hour forecast

Arctic Oscillation Index, North Atlantic Oscillation Index, Pacific North American Index.

https://www.cpc.ncep.noaa.gov/products/precip/CWlink/daily_ao_index/ao.shtml

Ensemble Mean AO Outlook

https://www.cpc.ncep.noaa.gov/products/precip/CWlink/pna/nao.shtml

Ensemble Mean NAO Outlook

https://www.cpc.ncep.noaa.gov/products/precip/CWlink/pna/pna.shtml

Ensemble Mean PNA Outlook

+++++++++++

Re: Re: NG 12/1/25-

By metmike - Dec. 8, 2025, 11:48 a.m.

http://appinsys.com/globalwarming/ao_nao.htm

AO BELOW

++++++++++++

This below has been the pattern the past 2 weeks:

La Nina Winters have more amplified, merional type flow........from north to south and a Greenland Block is more likely during a La Nina, like we have currently.

The pattern we had recently was an AMPLIFIED version of the La Nina signal depicted below.

https://www.hometownforecastservice.com/2020-2021-winter-outlook/

++++++++++++++

Below is going to be the NEW pattern in 2 weeks. This is the jet stream at 250 mb which is 34,000+ above the ground, up where the commercial jets fly! Note the big upper level ridge building in the East.

The upper level trough in the East RECENTLY will be replaced with this upper level RIDGE. The steering currents there will be from the south, replacing the flow that had been coming from Siberia, with cross polar flow, thru Canada, then plunging deeply into the United States, all the way to the Gulf of Mexico as depicted on the map above.

https://mag.ncep.noaa.gov/Image.php

Re: NG 2/2/26-

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By WxFollower - Feb. 2, 2026, 1:54 p.m.

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tjc/MM,

Had I still been active, the only trade I MIGHT have even considered would have been buying a few well OOM puts at a fair price (not buying at the ask if the spread were too large). This way one wouldn’t have to be worried all weekend about a potential huge loss if shorting actual contract(s) as the most you could lose would obviously be the put’s buying price. But it’s easier to say this now in hindsight.

Re: Re: NG 2/2/26-

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By metmike - Feb. 2, 2026, 2:19 p.m.

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Great comment, Larry!
In that same world of speculating what might have been in the realm of should have, could have, would have. 25 years ago I traded 100 lot orders and held positions over the weekend. If I had been short 100 contracts from Fridays close, I would be up over 1.1 million right now.

Of course the margins are way too high from recent volatility for anybody to hold a,position overnight that large without an account with well over a million in equity.

And trading 20 contracts today is like trading 100 contracts then because of the enormous moves in such short periods of time.

And the weather maps on Friday didn’t tell me this was a great idea.

Realistically, i should have sold aggressively on the expected retest of last nights open but its almost impossible, as you know to sell something that’s already down $6,000/contract early in the trading session.

However, the models got even milder so NG went even lower…..and lower and lower.

Down over $11,000/contract.

This might be more than the record down day the Monday after the blow off top the previous Friday in December?

435,000+ contracts traded in just the front month, March!

Re: Re: Re: NG 2/2/26-

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By tjc - Feb. 2, 2026, 5:47 p.m.

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MM/Larry

Excellent discussion, Mike; and Larry, you need to 'act' on your instincts.

I guess what I am hinting at is 'behavioral' tells. End of month buying, moves that are "too" exhilarating, culmination moves at excessive levels, whatever one might call it. I have seen it in the Feeder Cattle top, silver last week, ngas last week, and beans/corn in weather markets. In retrospect it "should be easy" to pinpoint, but it never is. Yet, there IS a CLIMAX, and the last buyers never fare well.

Is anyone aware of a printed text describing these climaxes?

Tim

Re: NG 2/2/26-

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By WxFollower - Feb. 2, 2026, 9:22 p.m.

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Well, what do you know?! Todays drop was the largest in 31 years:

Natural Gas Prices Plummet as Weather Looks Warmer

Updated Feb. 2, 2026 at 3:07 pm ET

1502 ET – Natural gas futures drop 26%, the largest one-day percentage decline since 1995, on warmer weather forecasts and expectations of inventory buildup. “Did the data trend warm enough to justify a more than $1 plunge? Of course not,” NatGasWeather.com says in a note, adding that natural gas price moves “often overshoot.” The Eastern half of the U.S. is expected to warm “well above normal,” the forecaster says, while production recovers after freeze-offs last week. The most-active contract closes at $3.237/mmBtu. (paulo.trevisani@wsj.com; @ptrevisani)

https://www.wsj.com/articles/natural-gas-prices-pull-back-after-weather-driven-rally-4f77624d?

Re: Re: NG 2/2/26-

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By metmike - Feb. 2, 2026, 9:56 p.m.

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Thanks much, Larry!

Natural gas futures drop 26%, the largest one-day percentage decline since 1995,

Where are they getting since 1995 from???

I've been trading since 1992 and this is easily the BIGGEST I remember.

Here's 1996 below. Low storage and the expiration of the January contract caused what was the most extreme move ever at the end of December AT THAT POINT but it paled compared to today. The most active day for any day in 1996 was less than 100,000 contracts traded. Today, the March contract by itself traded 500,000 contracts, over 5 times that.

This was unprecedented in natural gas history............period!

https://futures.tradingcharts.com/historical/NG/1995/0/continuous.html#footerclose

There were a couple of other years on the chart below that had a potentially bigger daily move down on an ABSOLUTE sense(because prices were so high) but not on a relative % scale.

https://www.macrotrends.net/3965/us-natural-gas-prices

This was the big drop on Monday, December 8, 2025 after the huge blow off top on the previous Friday, December 5, 2025.

https://www.marketforum.com/forum/topic/116291/#116451

Today's move below, blew that one away by a wide margin, especially using % of the price which started much lower.

Re: NG 2/2/26-

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By WxFollower - Feb. 2, 2026, 11:17 p.m.

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Hey Mike,

I don’t know why 1995 was mentioned.

I did a Google/AI of

“largest natural gas price drop in history” and got this:

“Other significant drops include a 16.5% one-day decline in November 2018 and a 44%, two-day plunge in June 2022 due to a major U.S. LNG export outage Natural Gas Intelligence. “

Actually, although I couldn’t find that 44% two day decline, I did find a 16.7% drop on 6/14/2022, a Tuesday:

Per NGI, that 16.7% drop was then the 3rd largest drop in history:

Natural Gas Futures Bounce Back After Third-Largest Drop on Record

By Kevin Dobbs

on June 15, 2022 at 5:49 p.m.

Published in:NGI All News AccessFiled under:

Natural Gas Prices

Following one of the biggest plunges in the history of natural gas trading, futures rebounded on Wednesday as traders digested the impact of a major export outage against a broader backdrop of robust global demand.

https://naturalgasintel.com/news/natural-gas-futures-bounce-back-after-third-largest-drop-on-record/

Looking further ahead on investing.com, there also was a LATER 17.0% drop on 6/30/2022, a Thursday:

There was a 17.5% drop on 11/15/2018, a Thursday, which was one day after an 18.1% rise:

So, putting the pieces together, it appears that 6/14/2022 was then the 3rd largest drop and that 11/15/2018 was either the largest or more likely the 2nd largest. I still need to search for one other of the largest before 6/14/2022.

From AI as I already posted:

Significant Historical Drops: In November 2018, natural gas dropped roughly 18% in one day (nearly 80 cents), notes MarketWatch.

Re: Re: NG 2/2/26-

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By metmike - Feb. 2, 2026, 11:29 p.m.

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Thanks, Larry!

Re: NG 2/2/26-

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By WxFollower - Feb. 3, 2026, 2:09 a.m.

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YW Mike,

Ok, I found the other big drop and it wasn’t in 1995. It was on Thursday 3/18/2004 and it was -19.1% (see image below), which means until yesterday had been THE largest drop of any day since NG started trading in 1990. Note that other than yesterday, surprisingly none of the other top drops were on a Monday! Isn’t that kind of counterintuitive?

In summary, the largest drops in descending order were on a Mon (26% in 2026), Thu (19.1% in 2004), Thu (17.5% in 2018), Thu (17% in 2022), and Tue (16.7% in 2022).

Re: Re: Re: NG 2/2/26-

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By metmike - Feb. 3, 2026, 2:11 a.m.

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The 18z GEFS, 6 hours ago was another whopping -20 HDDs bearish!

This last 0z run confirms that previous run. The price is $250/contract higher and $1,000/contract off the lows tonight. After the biggest 1 day move down in the history of natural gas on Monday, by a wide margin it's hard to not imagine some sort of a recovery, even with extremely bearish weather.

The market already OVER dialed in this milder weather on Monday. It's possible we will turn cold again and have a bounce up but its tough to conceive of prices getting anywhere close to where they were last month.

Re: NG 2/2/26-

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By WxFollower - Feb. 3, 2026, 2:23 a.m.

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Hey Mike,

Thanks. In case you missed it, we again typed posts at the same time and mine was posted 2 minutes before yours. Please check it because I found the other big drop date.

Re: Re: NG 2/2/26-

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By metmike - Feb. 3, 2026, 2:35 a.m.

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Yes, Larry great job and I think that makes much more sense looking at how crazy the price would be in those days before fracking, when storage wasn’t as high and the lag in time to recover from low storage took much longer.

Re: Re: NG 2/2/26-

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By metmike - Feb. 3, 2026, 2:39 a.m.

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im surprised we don’t have several big change days closer to expiration on your llost tells me that close to expiration, on average its more volatile.

Natural Gas Prices Plummet as Weather Looks Warmer

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