Biotech (IBB) is trending higher and may reach a top right during the election.
If that happens and then reverses, it may be posting a bearish MACD divergence on the weekly chart.
From the low during the week of March 20th, we see a potential Fibonacci time correlation in effect. A pull back low occurred during the week of June 12th, a Fibonacci 13.
Interestingly, the week of November 6th, is Fibonacci Week 34.
On the sidelines for now; watching for a trade set-up.
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It was a wild ride in the futures market starting this morning around 6:30 a.m. EST.
Nat-gas, is similar to silver where it likes to spike lower or higher as its terminating move.
From a UNG standpoint, that lower pre-market spike was all the way down to 10.66.
Price action recovered and was essentially back in the previous day’s trading range before the regular open.
As done yesterday, the chart of UNG has been modified to show the NGX20, futures activity.
Doing so, paints a more realistic picture of what’s going on.
As of this update, UNG is at 11.16 and has already posted a new daily high (a classical analysis buy signal).
Using the weather:
As we enter a grand solar minimum, weather forecasting (to predict nat-gas moves) is not viable.
The weather is already extreme and will continue.
Earthquake activity has picked up dramatically … it’s off the scale; no pun intended. In addition, we’ve got weather extremes, crop failures and volcanic activity.
All of this is happening at the same time. The source at this link does an excellent job of monitoring earthquakes and associated phenomena.
These two links, here and here are good source for weather extremes and crop failures.
Unanticipated weather extremes could launch nat-gas, UNG to levels atypical for a seasonal (winter) position.
One well placed earthquake fracturing gas distribution lines, could do the same.
Typical nat-gas move:
A seasonal nat-gas move, starts around late September, early October and tops out just before December.
The possibility of weather extremes could push that top out into January or February … completely unexpected.
Price action is the key. So far, it’s moving off the danger point to slightly higher levels. We’ve opened a sizeable position and will follow the price action on up with a stop as needed.
Depending on how that action behaves, the current stop level (not advice, not a recommendation) is tentatively set close to yesterday’s low: UNG 10.98
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Natural gas trades as a futures contract nearly 24/7. Therefore, the daily chart of UNG is misleading.
Not shown on the standard UNG chart is the most recent low.
That low, in the futures market was right around 7:30 a.m EST on Wednesday, September 31st.
By looking at a chart of UNG, one would think the low for nat-gas occurred today. Not so.
We’ve modified the UNG chart below to represent recent price action on the November contract (NGX20), not shown on UNG.
The low from yesterday’s action is clear. Also clear is today failed to penetrate that low even though a new daily low appears on the unaltered chart of UNG.
In all, it means were at the danger point for natural gas.
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Price action itself has negated the breakdown scenario in Amgen (AMGN).
Instead, we now have a wedge that’s forecasting a move higher.
Using a measure move off a wedge breakout (yet to occur), we can project AMGN to the 290 area.
The expectation is the overall biotech index (IBB) will move higher as well. If so, there’s a potential to form a bearish weekly MACD divergence if IBB makes new highs.
The Nat-Gas report is out tomorrow. Price action is set to move higher.
It’s not perfect. A better set-up would have more volume at the support penetration.
So, we’ll see how it goes early in Thursday’s session.
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Ever since the “Derecho”, the inland hurricane, it has not been the same for corn.
ETN, CORN, shows we’re at a 38% retrace that’s also support.
Next crop progress report is scheduled for October 5th.
The volume characteristics for CORN have changed over the past four months.
There is trading interest in this sector.
Last year, trading volume in CORN had died-off by this time. Not so, this year.
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Natural gas price action (UNG) could be a case of sell the rumor, buy the news.
The EIA Natural Gas Report comes out at 10:30 a.m. EST, this Thursday.
The 61.8%, retrace level (from the June low to the August top) for UNG is around the 11.04, area.
If UNG continues lower in the next session and does not make significant headway (down), it may have found a bottom ahead of the report.
Note that price action can get volatile for a few minutes after the release.
Nat-gas is similar to silver in that regard … stop run attempts (and spikes) are the norm.
We’ve already come off a long term low during June this year. Now, we have seen a recent Sign Of Demand (using a Wyckoff term) during the past week … it all suggests bias to the upside.
Expandable version of the chart is here.
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Trading lower in the pre-market session is UNG.
The weekly chart shows obvious hits on a left side trend line.
Moving that line to the right edge, there may be a hit/confirmation during the upcoming session.
An obvious stop level (not advice, not a recommendation) would be last week’s low at UNG: 11.51
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Those late to the game on BTU may have cashed out with losses on Friday, September 25th.
So-called ‘expert’ (buy) opinion came out on the 17th and since then BTU has declined anywhere from -8%, to -27%.
We exited our BTU long on the 18th, with a 15.5%, gain.
Now, we see BTU contacting a nascent trend-line. There could be a trading channel formed as well.
If BTU maintains the trend, it’s rising approximately +3,000%, annualized.
At that rate, a 100% gain on a long position (not advice, not a recommendation) would take about six-weeks.
In other markets, biotech (IBB) pre-market action shows a higher open. If that’s the case, we’ll exit (not advice, not a recommendation) the BIS position and stand aside.
Update: 9:54 a.m. EST: IBB is reversing immediately from its open. BIS position maintained (not advice, not a recommendation) at this point.
Update: 2:39 p.m. EST: BIS exit @ 31.591
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Short out, short in. That was the trade action for Friday, the 25th.
The pre-market update hinted price action would rise; taking out stop orders at the area shown. IBB did just that and more.
Early in the session, within about thirty minutes it was obvious that we’re moving higher. The BIS position was exited at 33.10.
Profit on the short, held for ten days was about 6.5%.
Price action continued to rise throughout the day. Late in the session, the short was re-established via another position in BIS.
Not expected, was that IBB continued to move higher into the close of the day.
BIS moved correspondingly lower.
The position is showing a slight loss of -1.5%. This amount is well within risk parameters but does require that IBB opens lower and moves lower at the next session.
The chart, with an expandable version here, shows we’re at the top edge of an established trading channel.
Force Index, upward thrust energy has declined while at the same time price action finished the day right at the axis line shown.
There’s also a Fibonacci time sequence as noted.
The expectation is for a lower open and lower action during Monday’s session.
If price action opens higher, the short-covering scenario as identified in this update, is not in effect; the short position will be closed.
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The Danger Point® 