Monday, February 27, 2017

Natural Gas- Are We There Yet?

Natural Gas is off 32% from the Dec 28 highs of 3.902. Not a little. We are now in the period, Feb/Mar, during which NG often finds seasonal buying of a couple months duration. The question then,   "Are we there yet", once more arises.
 3 yr.chart
 click to enlarge
The answer I think, is the usual, "Not yet but we' re close. " 
Just under the previous lows in the above chart is the Fibonacci .618 retrace point at 2.48
With an internal sub wave measured move providing support around 2.50, new lows under 2.64 should run out of steam in that area, with shorts covering on all the above factors. 
It would be nice to see some positive divergence showing up on the RSI at that point as well.

1 month chart
 click to enlarge
Shorter term the choppy action since the Feb 22 low of 2.64 is typical of corrective waves and would be expected to resolve to the downside. That's not to say it will not have another little push to the weeks highs around 2.80 before heading lower.

Natty may well be making a very important pivot at the discussed levels with substantial upside potential based upon the very long term chart basing history. Stay tuned.

 25 yr. chart
 click to enlarge

Not a trading recommendation. Do your own research. Good luck.








Wednesday, February 15, 2017

Bonds Update

The Dec 12 post Bond Plunge Done was spot on and we have the medium term correction looked for.

6 mo.chart

click to enlarge
After what appears to be a rather modest retrace of the plunge down, upside momentum has run into trouble at the previous highs, and the 4th wave of lesser degree. 

Best case it now explores the bottom of the more recent range and extends the consolidation another month or two.

From an Elliott wave perspective this sideways structure is exactly what you would expect after a large trending move with many participants, the point of recognition associated with wave 3.
The completion of that primary impulse wave down, the break to new lows, will be wave 5.

 25 yr chart
 click to enlarge

The Fibonacci retrace points in the above chart roughly coincide with 5th wave measuring rules.
I am biased toward the 50% point as the lower number to complete a 1 of greater degree 3rd wave down.
The risk of a very long term change in trend for fixed income is extremely high after 35 years.

Pls do your own research and
This is not a trade recommendation merely Elliott Wave thoughts.

That Old Texas Hedge

Long physical, long futures. The oil market as a whole has got that position on; very high net spec length and very high stocks. Due to the extended sideways move since early Dec, it's at a relatively high number too.
A big bet on SOMETHING.
1 yr. chart
click to enlarge
While a choppy consolidation often breaks in the direction of the preceding trend, and that can happen at any time, there is definitely technical room for further choppy movement down, prior to any run for the highs. 
The overall length in the market, not to mention the prospective future exploration and production, will make tough going of the advance.
News that might propel the market to new highs, like an announcement of a border tax plan, will no doubt be seen as an opportunity to trim length.
3 yr. chart
click to enlarge
Note the Fibonacci  .382 retrace coinciding with the trendline resist around $57.20

Good luck and

This is not a trade recommendation.