Tuesday, November 9, 2010

Natural Gas: Spike Ahead?

It's been quite awhile since my last NG post. I am having technical difficulties with my charting package but expect that to be resolved shortly. In the meantime..The spot month low of 3.21 in the Nov contract was an exact .78 Fib. retrace of 2.40 to 6.11, slightly exceeding the 3.28 long term target mentioned here many times. This likely completes an abc down from 6.11.
This  has long term importance as a probable B pullback, making the current move up,  C with significant  upside risk.
click to enlarge
If the current structure up is equal to the first series of abc's,   it targets 6.92. If the move up equals 1.62x the first structure, it targets 9.22  Sound a little unlikely? It always does. 
Note the history of sharp spiking action on the monthly chart.
It is also important to note the clear ABC down from 15.70 in 2005 to 2.40, 4 years later. Within that context NG has only just started the next structure up. Here a 50% retrace targets 9.09.



Daily
The move up off the recent lows CAN be seen as either a series of 1,2's or more likely abc's.  AND abc's , while more difficult to count, are commonly found in almost ALL Natural Gas moves.
Please note the Fib numbers are plotted from the spot mo. points.
Taking out the .618 retrace above, at 4.47  should get things moving on the upside.
30 min
 Shorter term NG DID make a new high this morning, and after mucho overlaps, maybe it's time to run a little.
Holding the nearby Fib. retrace's .38 or 50% would be very encouraging for the bullish case. Considering the lack of spec long participation, that may start to be a feature.

1 comment:

  1. It will be interesting to see next week move on NG after today's bloodbath. Injection numbers are still high, but I see what you are saying about the abc's. Do you think timing wise we still have a couple weeks of consolidation before we take off? or is this a good entry point?

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