chartwatchers
Short

NatGas - Selling the breakout

FX:NGAS   Natural Gas (Henry Hub)
4120 89 55
This is what I was waiting for. I'm not going all in just 20% of my NatGas account.
We are on day 40. It's just too late in the daily cycle to have a follow through after this breakout.

This will be a test of my cycle count in NatGas. If I'm right the next DCL will be an ICL also.
We are going to tag the 200 SMA - maybe break below it - in the next 2-3 weeks.
Steep decline is coming.

Selling US NatGas Dec             at 3.42 $.
Comment: Selling the other 20%.
We will have the big volume by the close.
Selling US NatGas Dec at 3.4$
Comment: Mitasse asked, but it's important.
Price is always regressing to the mean. Big players - in this case Doha - is watching the 200 SMA for reloading the truck. Sometimes the pullback is so strong that price breaks it but later always recovers.
snapshot
Comment: And notice the RSI divergence.
We are going to earn 1$ on this one. The 200 SMA is at 2.33$.
Comment: Highest volume since July. Big players were selling today.
We were selling with them to retail.
I like to trade at the side of Empire.
And most traders think that "Winter is coming" time to buy NatGas.
It has nothing to do with the seasons. It will fall like a stone in the coldest winter.
Comment: Look at DGAZ volume....
Smartmoney was buying today! Highest volume this year.
snapshot
Comment: DGAZ easily could make 100% to 10$...
Comment: Someone posted Natty was falling last year because of warm winter.
Here is a chart which shows price halfed down in 2014. A very cold winter in North America.
snapshot
Comment: ".This summer was the hottest in the century. :(
Why one thinks the winter will be cold?
But even if its the hardest winter ever Natty still can go down.
Comment: Selling the next 20% .
I have 60% of the planned position.

Selling Us NatGas December at 3.44$.
Comment: I explain the position size because some people just doesn't seem to understand.
The 3 most important factor here is timing, volume and position size. All the other meaningless : like new high, weather, Putin etc.
1. Timing: we will top somewhere here in this daily cycle. MAybe topped today. Maybe only tomorrow. Maybe Wed. But this week we will top.
2. Volume I want to see a big volume in the breakout. Today we have the big volume no question. It doesn't mean smartmoney was buying. It means they were selling and hedge funds + retail was buying.
3. Position size:
I'm going to go up to a 40% margin impact in NatGas with this short.If you play DGAZ you should go only 20% margin impact maximum. Or maybe 13,33% maybe even better. It's important if we break higher I don't want to be margin called. This is the only way to have a chance to sell near to the top. So if my account is a 1000$ account when I sell the 100% planned position my margin impact will be only 400$.
Comment: SO now as I have the 60% of the planned position it means my margin impact is 400$ x 0,6 = 240 $. If I have the other 40% short tomorrow or Wednesday my margin impact will be raised by 160$ to 400$. That is still 40% margin impact of my whole capital. I don't say we will not pop up to 3,5$. But the chance is much higher now for a decline a very high for an IC decline.
Comment: Selling the next 20%. We are at 80%.
US NatGas december 2016 at 3.41
Comment: If we have a daily swing high I will add the last 20%.
Below 3.15$.
snapshot
Comment: We ha a swing high today. I sell 20% more so we are at 100%.
I will set a stop for the whole position at 3.3$ and wait. If I'm right in 15 trading days we will have a steep decline.
snapshot
Trade closed: stop reached
Comment: It's closed now stop was triggered. Try to find the next entry. At the next swing high maybe.
Look for the unfilled gap (top @ 3.444) from 2014 December, it may will be filled.
+1 Reply
shame that you closed, I think the short flaps now in accumulation finona 3.50
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Stopped out. If I don't stop I can listen to freakouters if it pops to 3.60.
Will sell it again very soon.
Reply
Chirurgo chartwatchers
therefore remains convinced that it will go down, you enter only the most on? I stay in, I think you get up 3:46, from June them targets 3.10 and 2.80
Reply
DS77 Chirurgo
Feels like the set up is still in place. Think we see NG slide this week. Is there another swing high now in effect? Can you tell me how you indentify them in this scenario? Thanks in advance. I no guy some DGAZ Friday under 4.00. Looking to add this week if we see follow through to the downside like I'm thinking.
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Think 3.60 looks like the next area for a potential short. May still happen this week even.
Reply
Hello. Sorry to hear to be stopped. Now can be shortable i wonder although technicals dont work on NatGas :)

Historic Resistance + RSI weekly divergence
+3 Reply
In the mind of a navel gazing stock operator:
1/...... Where are the cycles when you need them?
2/.......Why is navel lint always blue?
Reply
You went in too early. This is the breakout you should be shorting.
+1 Reply
DS77 traderzaius
I'm sure he's tired of hearing it, but he's often early to his trades. See Gold as the latest example. He could really improve his gains and limit his losses if he could learn better entry timing. Kind of odd that he jumped in this week, took his time legging in, but still manages to be so early he got stopped out.
Reply
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