Long

Updated

natural gas

I have been trading these larger swing over the last few weeks and have been pretty accurate. Todays reversal was a happy site. But this pattern is anything but simple. I don't think we are in a typical short term, ABC due to the pattern. And there was a bullish divergence that appears to be starting to play out. The BBands on the daily are very very tight. Big move coming!

And this monthly chart below is showing a very large bullish divergence. From this long term view...this looking like a typical B wave pattern that we are working through. I really feel that we are close to making a move. With the BBands showing that we are about to make a very big move...I am biased with a move up to break out of this flag and complete the B wave.

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Natural Gas 4 hour chart

IT appears to me that we are still working on a 3rd wave down. I am not sure where the very bottom will be. But I sold my Ugaz at the top and bought Dgaz right away for this drop. I have been buying and selling these swings nearly perfectly for the last two months. When the third wave ends in the next week or so....I will be expecting a somewhat long drawn out 4th bouncing in between the 2.72 and 2.64 range for a few weeks. After that ...we will reevaluate the potential depth of a 5th wave down.

While there is a huge gap with a bottom down at 1.974...I believe that is just a breakaway gap and will not get filled. So there is an elusive bottom right now and as I said before...We will try to estimate a bottom once we are in the 5th wave.

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4 hour chart
It may be that we are in a complicated ABC pattern. See the chart

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Daily Chart

so price had a reaction at this confluence of monthly moving averages, the top of a channel, and the .382% retracent. There is a bearish divergence that finally developed in the daily RSI. Even if price were to creep up just a little more, that would only call for a bigger bearish divergence. I still think this breaks down from here. How low? I just dont know yet. But I am targeting the 2.5 region.

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I just don't see us breaking out right now. This is not a strong impulsive run like in the past. It is weak......like a correction before a bigger drop. Not to mention, the short term cycle is nearing completion. Oh, and did I mention bearish divergences.

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Looks like the bearish divergence is finally playing out. I am watching my cycles measurement and we could get a pretty good drop for the next 10 days or so. The cycles don't time the trough perfectly but they get close most of the time. I'll have to watch the price pattern over the next few days to try to estimate a low. In the meantime enjoy the ride. Expect a larger pop and a good UGAZ buying opportunity at the begining of July.

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4 hour chart

Just a potential wave count for NG. If this is the start of wave C down, (which coincides with the cycle ending in the next two weeks), Then NG should continue down tomorrow.

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I got out of Dgaz around 6:30 this morning. Worked out great. I will be looking for a pattern similar to this yellow line one to help me feel comfortable that we are in a wave 4, preparing to drop much lower. I am first targeting the the 2.55 range. Not so sure if we crash below that. I will have to watch the price pattern. GL

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NG
Be careful for NG to start moving down again. But I just don't think its ready to drop that far. I think this wave 4 may end up being complicated and drag out for a while. We may even get a triangle pattern. We already have a three wave move up. Lets see if this three wave move pattern continues and we can predict a triangle pattern. Notice how we stopped at the .382% retracement. Monday will probably be the tell.

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Looks to me like we will be dropping into October. Lets see if this smaller cycle measurement applies. However....the much larger cycle suggest that we will not bottom until the beginning of next year. If that plays out then the bull run should be epic.

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SalN

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SalN