Waiting For The Next Shoe

Nat-Gas, at multi-year lows but for how long?

We’re not in Kansas anymore and to expect things to operate ‘normally’, is a strategic error (not advice, not a recommendation).

The last update on Nat-Gas, specifically the futures, warned of new lows before a significant reversal:

“The Nat-Gas futures contract for May (NGK23), needs to post above 2.383 soon (in the next day or so), or the contract is at risk of pressing to new lows.”

Well, we’ve moved on from the May contract to the June contract and that contract indeed posted a new low this past Friday, the 5th.

Just Because …

Just because nat-gas is down, does not mean that it has to go up. That type of thinking is another error, typically called a ‘mind trap‘.

A better way to think about the situation, is to figure on a ‘disruption’ of some type, resulting in either a destruction of supply or excess demand over the usual conditions for the season (weather) at hand.

So, let’s see if the charts agree with that premise from a Wyckoff analysis standpoint.

Nat-Gas UNG, Weekly

Each significant downward thrust is becoming shorter in net distance traveled.

The horizontal blue lines tell the story. We’re nearing the end of the down move (not advice, not a recommendation).

Now, on to the daily. Price action penetrated support and has reversed … it’s in Wyckoff ‘spring’ position.

Natural Gas, UNG Daily

Of course, what happens next is the question.

Just as this post said we’d revisit it towards the summertime, showing there’s no Fed ‘pivot’, we can also propose there’s likely to be a severe disruption in the supply of nat-gas (not advice, not a recommendation).

Housekeeping & The Junior Miners, GDXJ

The expected lower open in the GDXJ did not happen.

So far, it’s been a narrow range day (as of 10:47 a.m., EST).

Price action is oscillating around unchanged and there appears to be no urgency to move either direction.

Standing on the sidelines for now (not advice, not a recommendation).

Stay Tuned

Charts by StockCharts

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