Wednesday Links: The Biggest Myths in Economics

Happy hump day! Here are some links to devour…

Futures Links

Midwest and Northeast power companies scrambled for natural gas during the cold snap (FT)

Florida orange groves emerge unscathed from record cold temps (TIME)

Chicago Wheat has near-record speculative short positions and whispers of winterkill…can it bounce out of this bear market? (

Ignore Goldman Sach’s public top trade recommendations…you will probably lose (Zero Hedge)

China plans to cut down the total planted cotton acres this year (WSJ)

Other Fun Stuff

The biggest myths in economics…a must read on why ‘deficit doomsayers’  and the like are completely wrong (Pragmatic Capitalism)

What we learned about the market in 2013 (New York Times)

J.P. Morgan’s legal bills hit $31 billion as its stock touches an all-time high…one can only LOL (Reformed Broker)


Monday Links: U.S. Oil and Gas Production Shoots to the Moon

A handful of links to start this holiday week…

Futures Links

oil and gas production shoots to the moon (Frank Holmes)

American farmers move 1.6 million acres of conservation land into production (NPR)

The California gold rush of 1849 vs. the North Dakota oil boom of 2013 (Business Insider)

British Columbia lumber exports to China sets record in 2013, topping $1.17 billion (Stockhouse)

U.S. farmland prices drop for the first time in four years (

Cotton rides strong export numbers higher (Lubbock Online)

Other Fun Stuff

A high IQ doesn’t automatically correlate to trading success (Martin Kronicle)

Retail traders won’t escape the CME price hikes…bummer (Trader Planet)

Tuesday Links: Silver on the Brink of Crashing

Interesting reads for a Tuesday…

A nice mix of rain and sun boost Ivory Coast’s main cocoa crop (Reuters)

Silver is looking to crash (TheArmoTrader)

S&P 500 up 60% of the time in 2013 (Avondale Asset Management)

Heavy rains push U.S. cotton to three-month high (Bloomberg)

Reflect on the U.S. grain harvest with the last crop progress report of the year (

The NatGasPro on Stocktwits is a great source for fundamental information on natural gas (@NatGasPro)

The new economy: luxury brands thrive as down-market retailers struggle (Crossing Wall Street)

Brrrr…How High Can Natural Gas Rise on Cold U.S. Weather?

With below-normal temperatures forecast for the Northeast and Midwest for Thanksgiving Week, folks will be cranking up the heat more than usual for their annual festivities. With that anticipated rising demand, the January Henry Hub natural gas contract, the largest by volume, is riding a three-day win streak while the front-month December contract tests multi-month resistance levels around $3.8-$3.9 per million Btu.

After decisively breaking below $4 in June, the front-month contract has tested and failed to rise back above $3.9 three times. Looking at the chart below, natural gas:

  • Hit its usual summer peak in mid-July at $3.835 and then sold off
  • Failed to break through its July high in mid-September
  • Touched a multi-month high of $3.869 in mid-October but missed printing $3.9 for the third time.
Natural Gas: Is It Peaking or Will It Break Out?

Natural Gas: Is It Peaking or Will It Break Out? (Click to Enlarge)

Will natural gas finally breakthrough for a run at $4?

From a fundamental standpoint, the bullish arguments are in place. With colder-than-normal weather heading into December, traders may be anticipating an overall cold U.S. winter and are bidding up prices. According to the United States Energy Information Administration, about half of U.S. households use gas for heating.

On the supply side, oilfield services company, Baker Hughes, believes the total U.S. natural gas rig count will decrease 10 percent to 340 total in the fourth quarter this year. Longer term, Baker Hughes counted more than 900 rigs in September 2011 but that number has dwindled with falling prices.

Should natural gas fail to breakout, the January contract may provide a nice short-term sell opportunity especially if the weather starts warming up. Otherwise, the bulls may find themselves with a very happy holiday season.

For more… Liquefied Natural Gas: A Case for Rising Prices