Natural gas ($NGAS) is coming to a technical floor per count as well as predictive/forecasting model.
Price action in this 8-hour chart illustrates a recent down-swing consistent with an impulse, whose internal construction suggests a near completion, as price appears to negotiate a 5th wave conclusion.
Standing in the background appears to be a pattern, the entire construct. In its most basic form, Bill Wolfe's requires that:
1 - Waves 1-3 and 2-4 be declining in the same direction (here: down)
2 - Waves 2-4 be converging
3 - Point-4 be situated between Points 1 and 2, although this would only belong to the strictest definition, and these are empirical observations, as there is no formal literature from its author on this .
PREDICTIVE ANALYSIS & FORECASTING:
The predictive/forecasting model is calling for a bottom-most tolerable support as the "Lox" target (i.e.: extreme low value), defined as:
- TG-Lox = 2.542 - 28 JAN 2015
Model also offers the following ensuing NUMERICAL targets:
1 - TG-1 = 3.285 - 28 JAN 2015
2 - TG-2 = 3.798 - 28 JAN 2015
... as well as this top-most NOMINAL target:
- TG-Hi = 4.343 - 28 JAN 2015
An interim decline should serve to complete a set of background geometries. However, a reaction to the top-side is likely to prop price up to the defined targets. Directional indicator will remain NEUTRAL until this last fifth wave concludes.
Predictive Analysis & Forecasting
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Price churned around nominal/qualitative target over four 8-hour bar, validating relevance of this level, and accuracy of the Predictive/Forecasting Model - Reversal is nw a hgh-probability event - As explained before, a failure of a reversal from this level should prompt paying attention to higher timeframe, a rare but important indication that larger institutional players are controlling this price.
For instance, a M15 would demand that any further analysis be effected at a M15 x 4 = H1, and that H1 be done on H1 x 4 = H4, H4 x 4 = Daily and Daily x 4 = Weekly.
In this particular case, the daily is ceding to weekly. I am in the process of running some data and review the chart at the weekly level. Any new development would occur on a new thread ... Coming up very soon.
Note that a 2.332 projection was offered last January (see prior charts as well). However, this would represent an extremely low probability event -If and once these occur, the analysis demands that a higher timeframe be considered, in a factor of 4, as discussed before.
If your system points one way and my analysis the other, I would first trust what is familiar, and then use it as a method of refinement if it turns out to be wrong. However, I would make sure that it is wrong for the right reason (true negative) rather than for the wrong reason (false negative). Not every instance that your system is wrong, will it be due to itself. Other things might also affect it, so overtweaking might also cause it to turn too sensitive and not specific for what you are looking for.
In medicine, we first look for a sensitive test (high potential for too many false positive), but then we verify it via a highly specific test (low potential for a low positive). Here too, look for an indicator that will "ring" whenever it sees something that resembles what you are looking for, but may or may not be it, and then pass it through another filter that confirms that what rings is truly that which you are looking for.
If you can let a trading system help you do that, then you got something that nothing and nobody can contradict, no matter what.
$NGAS reverses from near-hit 2.542 target; Bullish outlook; 3.285 = hi-prob.:
@tradingview #natgas #oilandgas #oil