Monday, December 27, 2010

Natural Gas

It's been 10 days since the last post,  when the market had just printed 3.96, and the bounce to Fibonacci resistance called for was accurate.
"So a bounce from near here would be expected ...50% of the last 4.55 to 3.96 leg is at 4.25, .382 = 4.18."

Turns out both 4.25 and 4.18 are providing a little resistance, and it looks like the 4.18 may get a re test  (written this morning when trading around 4.00)
However the count still suggests further downside work and a new low for the Feb contract will coincide nicely with the 3.80 target for the spot month mentioned in Natural Gas Update from Dec 9;  
"If this top is in here an X wave could easily retrace .62 of the move up from 3.28 (to 4.65), to target 3.80."

 Jan Hourly
 click to enlarge
Note the 50% retrace at this afternoons highs of the 1. And if that -a-,-b-,-c- structure up is completed, a move down equal to the 1 (or a) will target 3.86 from here.  

These are relatively unexciting swings to be making calls on, however prints under 3.85 are to be viewed as potential end points for the X wave down mentioned above and in the last post. The significance of that is derived from the much longer term count; please see Natural Gas Review from June 8.
The likelihood of the 3.28 low holding is high as the .76 retrace of the 2.40 to 6.11 abc structure. And 2.40 is pretty solid as described in the above link.
So another set of abc's up from mid winter seasonal low's could be be expected.






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