We have an ultimate fight in Natty as the cycle low is approaching. The market knows that there is still a big potential on the long side but before the next leg up we need to print a bottom.
The H&S pattern is still valid. I just see a little triangle evolving in the chart (blue). It's usually a continuation pattern. If it breaks down the target price counted from the pattern is at 2.7-2.8$ . So we could tag the 200 MA with that breakdown.
The other important sign : we had 2 bearish candlestick on the last 2 days. On Thursday we printed a shooting star. It appears at the end of a 4-day-uptrend. It opened higher, traded much higher, then closed below its open. It looks just like the inverted hammer except that it is bearish. On Friday we printed a hanging man A hanging man is also a bearish candlestick pattern that forms at the end of an uptrend. We had a significant sell-off near the market open on Friday, but bulls were able to push the price back up so it closed near the opening price. The large sell-off is an early indication that the bulls are losing control and demand for the asset is waning.
So we had a double bearish candlestick combination at the end of the week. The shooting star's volume was very high, and the hanging man's volume was quite good as well.. It seems to me that the key reversal's high (3.5$) was defended very seriously...
SO I say this is still a short but as we are getting late in the cycle and I don't want to be tricked as there is a 10% chance that we printed the DCL on 09.01. I will set a stop above 3.5$. I think if that level is broken after the key reversal and the hanging man- shooting star candlesticks : we are heading higher and that will be a powerful move. If we stop out I will start a long trade for the next leg up.
09.January was day 40 in this cycle. It's way too early to have a DCL there after the long 2015 intermediate cycle.... But never say never : I give 10% chance for that. I think we are too late now to break above 3.5$ and print a lower low again. That is the reason I'M setting the stop above 3.5$.
If we stop out I'm out of the short trade.
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Nice daily candle at the open... I would like to see the break of the hanging man's low today.
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Keep in mind we don't have too much time. So the drop should be fast in 3-4 days.
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Today we broke the hanging man candle's low and near to the triangle's lower trendline... Breaking down : now or never.
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Closing near to the daily minimum. I'm looking forward to see some follow through tomorrow : breakdown from the triangle.
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SO far so good. Triangle broke down finally just as we waited. Now it will get interesting... All those traders who doesn't want to risk too much should close the position in the breakdown of 3.070$. I don't know how violent will be the breakdown. As we are late in the cycle we might reverse on the same day or the next. SO DON'T TRY TO ADD OR START TO SHORT NATTY IN THE BREAKDOWN! It's too late to short we will be long very soon. If you short here I guarantee that you will be caught in the short squeeze as the next daily cyle starts.
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2.9-3.0 is a good level to get out of the shorts I think. We don't need to catch the last coins of this trade.
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We broke down the triangle and tested it back and now we broke to new lows..
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As we are getting close to 3.0 and have a really good entry point I'M going to take profit on HALF OF THE POSITION.
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Any day can be the cycle low and the reversal will be violent. I'm starting to book some profits.
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Press play:
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If it bottoms that will be the time when ugaz's performance will be fantastic
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archie123
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Arpi --
Very glad for your posts informing and explaining of this further leg down before the rise of NG.
My respect for your analysis and forecasts, which was already very high, has increased further.
jolu
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Thank you arpi!
Your prediction was so accurate ,we opened under tge triangle..
From your words I infer we are close to bottom ,is it true?
Or we have more than few days heading down ?
@chartwatchers, thank you arpi! ,
i am ready to enter long right as the trend change at the end of the week or early next week ..
jolu
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@chartwatchers, realy arpi , excellent analysis very accurate ! although the last 2 days we were up not really understanding why,, but never broke the resistance upper.. and now it came!! at the end of the week as you told - we broke the 3.07 level and we have more room to head down with 4h and one day chart..maybe to 2.7
Thank you very much !!
waiting to enter long again begining next week i assume ..
archie123
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Thanks for the continued updates in NG. Very much appreciated.
Cheetsbaby84
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Hi Apri :). How high do you think NGAS will go when it finally reverses? Thanks!
MrRick
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I smell a bounce coming so I am testing the waters for a scalp. I bought UGAZ at 23.02 will let U know if I get egg on my face.
ON92
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very good analysis !
sweetcheese
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The EIA reports have been bullish over the last 4 weeks, yet gas continues to drop in price. Is this a bear trap before soaring up?
Very glad for your posts informing and explaining of this further leg down before the rise of NG.
My respect for your analysis and forecasts, which was already very high, has increased further.