Natural Gas – Daily Analysis
Natty closed several frames today and printed a few key signals. In this daily update, we’ll review the prints, trend alignment, and momentum to gauge the odds for the next move.
CANDLES
Natural Gas closed multiple frames with conflicting signals. The daily was bullish continuation, the 5D frame formed a Tower Bottom. The 15D made a neutral candle. Overall, candles signal a short-term move up, but the mid/long-term is still leaning bearish. Most likely, the weekly will close with a Bullish Engulfing and the next week will be bullish.
The technicals, however, are leaning bearish on practically all frames. The most concerning are several hourly frames that have been grossly overbought with high risk of a sharp bearish move ahead. If we add a recorded today 15D MACD bearish cross, the technical conditions overall are more than concerning.
As noted earlier, I remain cautious on a bullish turn. I want to see clear bullish signals on Friday on the monthly and a few larger frames first. Until then, I’m neutral and watching tomorrow’s print.
On the larger frames, Natural Gas stays bearish until a compelling bullish formation develops. Bulls scored on the rollover; now they need to sustain momentum into month-end.
MACD – 15-day
Today (August 28), Natty confirmed a 15D MACD bearish cross. The setup resembles 2011, and a partial replay wouldn’t be surprising. Under similar conditions then, price slid roughly 50% before bottoming near $2.00 in 2012.
ELLIOTT WAVES
Mid Term
(no changes, just refreshed the charts)
Mid-term, NG may have minimally completed a wave B as either (a–b–c) or (w–x–y) (green), opening a chance for wave C to start. I’m cautious with this view because the bounce off the low was corrective, and the gap raises more questions than answers.
Natty crossed the critical $3.193 level, invalidating an impulsive move down. The red path can still finish as a diagonal: with wave iii shorter than wave i, wave v must be shorter than wave iii. Assuming the top of iv is in place, the max stretch for wave v is $2.319 (see chart below).
The structure is getting more complex. The next two sessions will likely be decisive for the candles and may clarify the EW counts.
SUMMARY:
I remain neutral on Natural Gas after the rollover’s big bounce and waiting for the monthly, 2M, and 4M prints tomorrow.
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Happy Trading!
