Thursday, October 8, 2009

Natural Gas Update


As mentioned previously , on the spot mo. continuation chart, the c =a at 5.00 has been exceeded. So far the downside action from 5.12 looks corrective. The new target is c = 1.382 of a @ 5.57, that is also -c- = -a- on the Nov. contract, AND the long term .236 retrace of 15.78 to 2.40. That represents a significant cluster of resistance. Given the near record inventories, and the seasonal tendency for an intermediate term pullback from Oct on, the downside risk following the next leg up will be HIGH.

Additionally there is the potential for the pullback to last several months into the seasonal early winter low. If for instance that were to be a not uncommon 50% pullback on the spot chart  to roughly 4.00, that would  represent some real pain for holders of the Feb. contract.

I have to say it's been really nice to be bullish on something the last month. Especially natty. See Natural Gas Update 
  Natural Gas Slide
 and
Monthly Bar Chart NG
 Oh well, there's always next year.

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