Winter of Discontent: Pre-Market Update

Update (9/9/20, 8:11 a.m. EST): UNG, shows pre-market action trading higher, +2.11%, as expected.

Original post (9/8/20):

Natural gas and more specifically, the tracking fund UNG is at its trend line; A trend line that’s been in-effect since July 31st, this year.

The Winter of Discontent post on natural gas, indicated a major long-term reversal.  That analysis was complete with a test location (shown on the chart below).

It’s important to note, the test level was identified thirteen (trading) days in advance.

There was plenty of time to monitor price action, perform additional research and generate a supporting case before the test zone was reached.

UNG subsequently tested that level and never looked back.

Now, UNG has penetrated support (at the 13.00-area) and contacted its July trend line at the same time.

Essentially, in Wyckoff terms, it’s in spring position with the added technical condition of being at trend.  For more on Wyckoff “springs”, see this publication.

This exact point is the ‘danger point’.

If UNG does not immediately bounce higher (at the next session), the trend may be broken and we’re right back into a possible continuation of the bear market that’s been in effect for years.

It should be noted that ‘danger points’ are also the location of lowest risk.  Verification or failure of the move is not far away in either market direction.

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.
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