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 - maybe break below it - in the next 2-3 weeks.
Steep decline is coming.
Selling US NatGas Dec at 3.42 $.
We will have the big volume by the close.
Selling US NatGas Dec at 3.4$
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.
We are going to earn 1$ on this one. The 200 SMA is at 2.33$.
We were selling with them to retail.
I like to trade at the side of Empire.
And most traders think that "Winter is coming" time to buy NatGas.
It has nothing to do with the seasons. It will fall like a stone in the coldest winter.
Smartmoney was buying today! Highest volume this year.
Here is a chart which shows price halfed down in 2014. A very cold winter in North America.
Why one thinks the winter will be cold?
But even if its the hardest winter ever Natty still can go down.
I have 60% of the planned position.
Selling Us NatGas December at 3.44$.
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$.
US NatGas december 2016 at 3.41
I will set a stop for the whole position at 3.3$ and wait. If I'm right in 15 trading days we will have a steep decline.