Category Archives: BOIL

The Thrust Is Gone … Nat-Gas

April 1, 2024 By in BOIL, Natural Gas, UNG 1 Comment

Before It Can Go Higher …

Before Nat-Gas can reverse and head higher, it has to first, stop going lower.

One of the ways a market tells us it’s ready for reversal, is to print what’s called ‘shortening of the thrust’.

Essentially, each net movement over time (whether up or down), becomes shorter.

We can see that in Nat-Gas proxy, UNG, below.

Natural Gas UNG, ETF, Daily

Nat-Gas began its current decline around early October last year. Note, how each successive thrust lower has become shorter in net distance.

The inference is, ‘a reversal may be at hand’ (not advice, not a recommendation).

Recall, the prior post on UNG, link here, indicated the potential for reversal:

“The chart shows UNG, has penetrated support and is just ‘hanging’ there, unsure of what to do next.

It’s at The Danger Point®, where the potential risk of going long is least (not advice, not a recommendation).”

To be precise, in the futures market early the next day, a new low was posted; that new low was reversed by the open, with UNG higher.

Stay Tuned

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.

The Danger Point®, trade mark: No. 6,505,279

Nat-Gas … Heading Lower?

March 20, 2024 By in BOIL, David Weis, Livermore, Natural Gas, UNG, Wyckoff 1 Comment

No Breakout, Yet

The upside breakout anticipated and discussed in the last update has not materialized.

Instead of UNG, moving higher to penetrate 16.08, it’s moving lower.

We’re already at multi-decade lows, in Wyckoff spring position.

So, let’s look at what’s going on, getting down to a more granular level, the hourly chart.

Nat-Gas, UNG, Hourly

Action on the hourly shows a breakdown from a wedge.

Standard ‘measured move’ shows potential for UNG to target 14.50 – 14.60, (not advice, not a recommendation).

We’re already at historic lows, so continued downside may just be splitting hairs.

Strategy First

From a strategic standpoint, already discussed, is our new-normal environment of ‘disruption‘.

Expecting uninterrupted access to our current infrastructure is not the reality.

If UNG, manages to post new lows, we’ll address the potential for a strategic, long position (not advice, not a recommendation).

My former mentor, the late David Weis had a penchant for looking at the very long term, even yearly charts.

This also maps into Jesse Livermore’s approach; identify what’s likely to happen in a ‘big way’.

Remember, we have the EIA Nat-Gas report coming up, typically released on Thursday.

Stay Tuned

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.

The Danger Point®, trade mark: No. 6,505,279

Nat-Gas … Terminal Wedge

March 17, 2024 By in BOIL, Natural Gas, UNG, Wyckoff 2 Comments

Futures Open Higher, Late Sunday Session

Nat-Gas just opened higher, currently +2.52%, at 1.834, in the Sunday session.

A continued move higher past 1.893, on the NGK24, futures may indicate a potential breakout from a terminating wedge.

We’ll use the chart of UNG, heavily traded, highly liquid proxy for the sector.

Nat-Gas UNG, Weekly

It’s relatively straightforward.

An upside penetration of UNG 16.08, indicates probability of a breakout (not advice, not a recommendation).

On an inflation adjusted basis, Nat-gas is below the 2020 lows, and 26-year lows (i.e. Wyckoff ‘spring’ position), as shown at this link.

Stay Tuned

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.

The Danger Point®, trade mark: No. 6,505,279

The Usual Suspects

December 16, 2023 By in $SPSIBI, AMT, Biotech, BOIL, Bonds, CVNA, DRI, Federal Reserve, Food Supply, Genesis 41, GLD, Gold & Silver, Gold Miners, IYR, LABD, Natural Gas, Real Estate, Semiconductors, SLV, SOXS, SOXX, SPBIO, TBT, TLT, Uneducated Economist, UNG, Usual Suspects, WEAT, Wyckoff, XBI 1 Comment

Everything Happening At Once?

Not in any particular order; not advice and not a recommendation.

No 1. There (still) is no Fed Pivot. Seriously, have rates really, actually been lowered? Everyone has a huge case of ‘normalcy bias’. i.e., what the Fed did last time will happen this time.

The 40-year bond bull market from the 80’s, ended in 2020. We’re in a different paradigm now.

No. 2 Natual Gas UNG, is reversing. We’ll see whether or not there’s going to be a supply disruption.

No. 3 The semiconductors SOXX, now have a monthly bearish MACD divergence; daily and the weekly indicators posting even to prior tops (as of Friday’s close). 

No. 4 Components of biotech index XBI, are being shuffled around faster than deck chairs on the Titanic … or, the Olympic 🙂

Seems like a mad dash to add/remove, increase, reduce equities to prop things up. We’ll see how that turns out. Currently, XBI is right at resistance level, 86.50 – 87.0

Here’s just one example from an index, riddled with equities that have no P/E.

No. 5 Carvana is very close to posting new highs and potentially, running the stops.

No. 6 Has Darden Restaurants, topped out? 

The consumer is certainly tapped-out and no-one ‘needs’ a restaurant.

No. 7 Wheat is reversing; It is and has always been about the food supply.

No. 8 Gold, GLD, is currently not going higher (look at the divergences); silver (SLV) is in a major non-confirmation, down nearly – 55%, from all-time highs.

During the 1980s inflation, precious metals moved (upward) together.

Silver looks like it’s responding to the destruction/collapse of (economic) demand.

No. 9 American Tower (AMT), number two in the IYR index, posts a clear false breakout and reversal. 

If rates really are going (materially) lower, interest rate sensitive real estate should continue going higher, right?

No. 10 Which brings us to the bond market, TLT. 

Price action broke above established resistance, currently hovering above that level. 

It’s at The Danger Point®

We can see the set-up, a price action pattern repeated time and again, between the lower and upper blue lines, called a ‘Spring-to-Up-Thrust.

While the media laughs at the bears, let’s just see how this all works out.

Stay Tuned

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.

The Danger Point®, trade mark: No. 6,505,279

Nat-Gas … New Lows ?

April 20, 2023 By in BOIL, LABD, SPBIO, UNG, Wyckoff 1 Comment

The Tape Is Always Right

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.

We’ll look at the ETF proxy for nat-gas UNG, below, showing a Wyckoff up-thrust (downside reversal) condition.

As this post is being created (8:51 a.m., EST), the pre-market session shows the futures and UNG, oscillating about unchanged.

Natural Gas UNG, Daily

As with the upside reversal identified in the biotech sector (link here), we’re just reading the tape and acting accordingly (not advice, not a recommendation).

With that said, a trade was executed and closed in leveraged fund BOIL, with the following details:

BOIL Entry: 3.15

BOIL Exit: 3.45

Profit (Loss): 9.52%

The expectation was for a much larger profit.

However, price action is not behaving as if it’s in a strong up-trend. It’s even at risk of posting new lows as a result of the Up-Thrust condition noted above.

Meanwhile, biotech looks like it’s about ready to reverse.

Stay Tuned

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.

The Danger Point®, trade mark: No. 6,505,279