Yep. The title says it all. I have found evidence to support what I believe is future upward price movement over the next 2 months. After many many hours of exhaustive research, I can say with 100% certainty, backed up by years and years of historical data that......IT GETS COLD IN THE WINTER! Just some light humor. So I have two price targets for this upward move. This is not to be confused with what I think is going to happen by February (a much higher high at least $4.10), I'm talking short term...2 weeks from now before a decent pullback. The first is for Natural gas to reach the 100% measured move of "W" at $3.30, which happened in the beginning of November. There is a pretty good resistance level there as well. The 2nd price target, which is what I am hoping for and which makes a little more sense to me, is the 100% measured move of the first part of this current "Y" wave that began last week. That is the FIB that is colored purple. There is a gap to be filled there AND, a 50% typical correction for this WXY wave move would bring it down to retest the trend line and also stay within the yellow path. As far as how this would equate to UGAZ prices.....I really don't know yet. I watch the NG chart to get an idea of when we are close to a trend change for UGAZ. I will be watching the structure on the daily to try to figure out where we are in the wave count and weather or not we are close to a warm weather reversal. GL
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I did not think it would do it but it looks like NG is going to fill that gap just below. SO my very short term was wrong. But I am still holding because I know it will eventually rally for at least a month.
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This is my worst trade ever. Yes there will be a winter rally but now that NG broke below the wedge line, I am questioning how low this will go and if I want to hold it or cut my losses and play another angle to make some of my money back. So I went back to see if there are any other gaps in the past that this could possibly fill and there is. I show them on the next chart. There is one just below our current price and then of course there is that red line that has been an area of strong support for a while. But way below that is another large gap. While it seems unlikely for NG to drop that much with all the snow that has dumped on parts of the nation, I suppose it could happen. If we make to the red line then I am expecting a bounce but if that bounce does not show much strength, then it may just be a set up for that large lower gap. If that is the case then we could possibly not see the winter rally begin until the middle of January. While it is very rare for the winter rally to hold off until January...it has happened.
Notice how low the rsi gets before each winter run.
I was expecting to pick up ugaz when we get a hair under 30 rsi. There a quite a few traders that I know are trapped in the 9s.
so it could be worse.
SalN
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@dsankie21, yes. But perhaps it’s a mistake to try to predict the weather and demand for gas
Urus
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@SalN, As you can see the price UGAS in 2018 in mind that December 20 will be 10-1, a reversal on Bank credit Suisse
dsankie21
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@Urus, I don't see how a reverse split is relevant to short term pricing. NAV remains the same. it's based off natural gas futures.
It doesn't seem relevant.
Urus
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You can also see in 2018 the price of UGAZ according to your schedule above $ 70.
TomPower
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Sal getting worried, I'm excessively long from higher prices(breakout trader) it will fill that gap and then some , in fact the whole commodity sector is getting smoked today. I bought all this BS about Gold and silver and inflation! crying in my beer and my broker will want me to add more money to my dwindling account
SalN
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Well I’m in ugaz from 8.65 and I am not worried. Bummed that I didn’t think it would fill this gap this far into December yes but like I said, this always runs for a winter rally once demand for NG jumps. Supply for NG is usually nearly flat all year long. There is a minimal increase of supply in the winter. So for this trade you will have to be a little patient.
On a side note for gold. All the big names are saying that gold has simply been basing for a huge rally to start at the end of this month or January. While I do think we will have a strong rally just like the last two years. I am not convinced that this is the start of gold to 5,000. @TomPower,
swift32
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@SalN, It was a warm week this past week and natural gas inventories did not budge much, especially with the rig count up. This coming week will be pretty cold, so if its going to turn around, it may soon. I don't think its going to go to the moon yet with the supply situation. It is very volatile...
SalN
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@swift32, Yep hard to time the winter pop but it’ll be here soon so I’m just not worried
TomPower
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@SalN, We are right now holding at your red trendline. lol I'm seeing red, should hold today
I was expecting to pick up ugaz when we get a hair under 30 rsi. There a quite a few traders that I know are trapped in the 9s.
so it could be worse.