Category Archives: Natural Gas

Life Insurance … Another ‘Sleeper’

May 4, 2024 By in Life Insurance, MET, Natural Gas, UNG Leave a comment

The Biggest, Of All?

Just like the Nat-Gas reversal, which is now on-going, Life Insurance may be the biggest downside sleeper of all (not advice, not a recommendation).

Searching the YouTube vortex, turns up this, on the largest cap of the sector; Met Life, MET (time stamp 2:27).

It’s the usual suspects. Another (almost) knee-jerk, ‘buy-the-dip’.

Let’s take a look at what’s really happening with Life Insurance, looking at the long-term view.

Life Insurance Sector, Weekly Close

The last major melt-down during ’07 – ’09, had the index collapse over 76%

Moving to the topping action highlighted in the zoom area, we have the following:

Then, on to the largest cap in the sector, our chief cook and bottle washer, Met Life (MET), there’s this:

We may find out as early as next session, if MET is in a downtrend or spring position, ready to move higher (not advice, not a recommendation)

The chart nuance advocating against a viable spring is the reduced upside volume on Friday when compared to a day earlier; up volume contracts 46%, when compared to downside volume on Thursday.

Stay Tuned

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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

Oil Backs Off … Nat-Gas Bottoms

April 17, 2024 By in Natural Gas, Oil, Oil & Gas, Prechter, UNG, USO

All, In Just Three Days

Let’s get started with where we left off, with oil.

The last update said this:

‘largest bullish positions, gasoline futures and options’

The one before that, said this:

‘ … we’re at the 161.8%, projection and USO is hesitating; at the same time, Nat-gas, UNG, appears to be forming a long-term bottom’

The implication was: We’re at a Fibonacci level in USO, while the ‘herd’ has positioned themselves (massively) long and Nat-Gas appears to be reaching a (potential) long-term low.

Three trading days later, we have this:

Oil Tracking Fund USO, Weekly

If you look closely, the grey dashed line, the Fibonacci 161.8% projection, is just visible and extends out of the green line, highlighting that level.

A possible, nascent reversal.

Way back in 1902, after studying the markets intently, Wyckoff, discovered the following (paraphrasing):

‘Forces were at work, moving prices around, independent of any fundamentals, not connected to any valuations.’

Nearly, a century later, Prechter says this as well in one of his many interviews (paraphrasing, again).

‘If somehow, I was able to give you the newspaper headlines for tomorrow, you would not be able to tell me if the market was going to go up or down’.

The media is presenting oil (gasoline) and Nat-Gas prices as inversely correlated. Looking at the topping chart of USO and the bottoming chart of UNG, it’s believable … for now.

Downward thrust in Nat-Gas UNG, appears to be exhausting itself after a 20-month, bear market.

Risk is never zero, but currently appears to be at a low for UNG (not advice, not a recommendation).

Stay Tuned

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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, Goes Negative

April 13, 2024 By in Natural Gas, Oil, Oil & Gas, UNG, USO, Wyckoff, ZeroHedge 3 Comments

… At Least, In Texas

Storage facilities in Texas are paying to have someone take excess Nat-gas.

As this link says, the ‘reason’ for negative Nat-gas, is high oil prices prompt drillers to increase oil production, along with (by-product) Nat-gas, driving down the price.

We’ll cover Nat-gas (UNG) in a separate update which by the way, on Friday, posted another Wyckoff spring set-up.

The question du jour is, ‘does oil go higher from here?‘

If oil is going higher (or likely to go), then Nat-gas may be pressured downward for longer.

International Chaos

The amount of ‘pontificating’ from the media on what oil is, or is not going to do, is mind-numbing.

Wyckoff himself said, we’re attempting to find out ‘the next probable direction’ for the market, which of course, can never be known for sure.

With that, let’s go to the truth of the matter, the chart.

Oil Tracking Fund, USO, Weekly

Shown on the chart, is a Fibonacci projection from the lows of March 2023, to the first wave high of April ’23, then back down to the wave low, in May ’23.

It might be hard to see, so the first waves are highlighted with green dashed lines.

At this point, instead of asking the question ‘where’s oil going?’, a better question may be, ‘is the chart of USO “respecting” the Fibonacci projections?’

Looking at the chart, it’s an obvious, yes.

Right now, we’re at the 161.8%, projection and USO is hesitating; at the same time, Nat-gas, UNG, appears to be forming a long-term bottom (not advice, not a recommendation).

Stay Tuned

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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 … The ‘Sleeper’

April 6, 2024 By in Gold & Silver, Natural Gas, UNG, Wyckoff

Any Bulls Left?

It’s all bearish on the Nat-gas front.

Way back in 2001, it was all bearish on the gold front as well; lows were around $254/oz. – $255/oz.

How did that work out?

No, Nat-gas is not gold but at this point, it’s possibly just as ignored as gold was, then.

The strategy or potential reasons for a rally in Nat-gas, have already been addressed here and here.

So, we’ll cut to the chase, looking at the proxy, UNG.

Natural Gas, UNG, Daily

It’s possible, the March 27th, penetration of support (covered here) and subsequent recovery, is a Wyckoff spring set-up (not advice, not a recommendation).

If we’re in a spring with the wedge in-effect, meaning, the market’s not going to morph into another structure, then it’s likely, Friday’s action was a test of both the spring and the wedge (breakout).

Supporting the ‘test’ scenario, we have Friday’s action pulling back to the lows; volume contracts by over 37%, when compared to the day prior, Thursday.

Of course, this is all very nuanced action and can be blown away at the next session.

However, as with our gold example, no one was looking for a major, long-term reversal at the time.

Stay Tuned

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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 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

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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 Slams Target, New Lows

March 27, 2024 By in Appalachia's Homestead, Natural Gas, UNG, Wyckoff 2 Comments

Near The Reversal?

Nat-Gas, UNG slammed past the target forecasted five trading days ago, in this post.

Today, UNG opened gap-down, then traded down even more.

Currently (as of 1:10 p.m., EST), we’re at 14.38, down -3.88%, for the day.

Penetrating support to new lows, by definition puts UNG in Wyckoff ‘spring’ position.

That does not guarantee an upside reversal, it just means the conditions are met.

Strategy First

The potential for problems with supply have already been presented here, here, and here.

The human cost of what’s going on in our nation, can best be described by this post from Appalachia’s’ Homestead.

All of which brings us to the chart of Nat-Gas, UNG.

Natural Gas, ETF Proxy, UNG, Daily

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).

Typical market behavior, is to come back and test a breakout whether it’s resistance or support.

For UNG, that would be in the vicinity of last week’s trading range, near UNG 14.90 – 15.00 (not advice, not a recommendation).

Summary

Know your market.

The futures for nat-gas are volatile and like to generate spikes both on the upside and down.

Tomorrow, we have the EIA nat-gas report; the possibility for more volatility is just one day away.

Stay Tuned

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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

Supply ‘Disruption’ & Nat-Gas

March 26, 2024 By in Food Supply, Natural Gas, UNG, ZeroHedge 1 Comment

Playing Out, In Real Time

Bridge in Baltimore collapses after container ship strike; major port is ‘paralyzed’.

Harvard to screen a movie about blowing up pipelines, and then:

Nat-gas rachets down; volatility is low, all quiet, for now.

Strategy First

It’s been almost a year since the first post, discussing the potential for a disruption to the nat-gas supply.

A lot of things have happened since then.

For example, large speculators have likely been forced-out of the UNG, proxy. Quoting from the link above, August of last year, we have this:

“If everybody’s ready for it … it won’t happen at all or not when it’s expected to happen.”

So, the crowd and the crowded trade, is probably gone.

Then, we have continuing infrastructure disconnects, like the bridge collapse above, the aviation sector, and cattle (the food supply), to name just a few.

Looking at the weekly of UNG, with Force Index (lower panel), we see downside pressure is dissipating.

Natural Gas UNG, ETF, Weekly

Weekly thrusts lower, have less energy (magenta arrow)

In addition to weakening downside force, the weekly range is also becoming more narrow (blue arrow).

So far, there’re no signs of increased demand, and UNG can continue on its way to lower levels.

However, we’re already at multi-year lows; indicating, with each net downside move, downside risk is also being reduced (not advice, not a recommendation).

Stay Tuned

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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

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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

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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

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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