Category Archives: Natural Gas

Trading Room – 21st February, 2017

Today’s Trading Room looks at NGas, EURUSD, USDJPY and EURGBP.

To learn what the Trading Room is about see first Trading Room analysis here.

Trading Room will focus on classic technical analysis. Elliott wave analysis will be for support and for targets / invalidation points.

NGas

TECHNICAL ANALYSIS

NGas Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Natural Gas continues lower as the last analysis expected. Today’s strong volume spike may be a selling climax. In the short term, it may be followed by a small consolidation before price may continue lower.

For the very short term, if price breaks above the steeply sloping rose trend line, then look out for a deeper correction. Expect price to fall to next support at 2.55 while price remains below that line.

This trend is not yet extreme and there is no divergence yet between price and RSI to indicate weakness.

ELLIOTT WAVE ANALYSIS

MAIN WAVE COUNT – WEEKLY CHART

NGas Chart Weekly 2017
Click chart to enlarge.

This wave count expects Natural Gas is in a new bear market to last one to several years.

MAIN WAVE COUNT – DAILY CHART

NGas Chart Daily 2017
Click chart to enlarge.

If a deeper correction does develop here after the selling climax, then it may be a primary degree fourth wave that may last a Fibonacci 13 or 21 days. First, the rose trend line on the TA chart above must be breached to indicate primary 3 is over. So far it is less than 1.618 the length of primary wave 1, so it is likely to continue further.

ALTERNATE WAVE COUNT – WEEKLY CHART

NGas Chart Weekly 2017
Click chart to enlarge.

Downwards movement from the last high may be primary wave B coming to an end as a very common expanded flat correction.

ALTERNATE WAVE COUNT – DAILY CHART

NGas Chart Daily 2017
Click chart to enlarge.

Minor wave 3 has only just broken below the lower edge of the base channel. This is how a third wave should behave. The selling climax of the 21st of February may be followed by a brief shallow correction before price continues lower to complete minor wave 3. Minor wave 4 may not move into minor wave 1 price territory.

Both Elliott wave counts expect Natural Gas to continue lower from here at least to make a new low below 2.549. That has not happened yet.

USDJPY

TECHNICAL ANALYSIS

USDJPY Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

I have published this pair often in Trading Room. That is because I consider it to be a good opportunity at this time. The idea of Trading Room is to look for markets that are trending and find entry points to join the trend in order to have a wider range of opportunities to profit from.

This is my favourite trade set up: a breach of a trend line followed by a back test of support or resistance. USDJPY has done this with the blue trend line.

The risk with this set up is that the trend line is too steep and not often tested, so price may break back below it. The risk does not at this stage look to be high, but it must be acknowledged.

Trading advice for members only: [Content protected for Elliott Wave Gold members only. To subscribe click here.]

ELLIOTT WAVE ANALYSIS

USDJPY Chart Daily 2017
Click chart to enlarge.

This market is behaving as expected so far.

EURUSD

TECHNICAL ANALYSIS

EURUSD Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Last analysis of this pair expected a bounce to unfold after the candlestick of the 15th of February showed a bullish long lower wick. This was followed by a strong upwards day, and now a strong downwards day.

This is not correctly a bearish reversal pattern; the red candlestick for the 17th of February does not engulf the green candlestick for the 16th of February. However, it is still a strong downwards day and is bearish. Price may now be finding some resistance at the Fibonacci 13 day moving average and the mid line of Bollinger Bands.

ELLIOTT WAVE ANALYSIS

EURUSD Chart Daily 2017
Click chart to enlarge.

On Balance Volume remains bearish. A purple resistance line is added. The last test is another small bearish signal.

EURGBP

TECHNICAL ANALYSIS

EURGBP Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

This pair is presented in response to a member’s request. While the Elliott wave count is bearish, this classic analysis is not so much.

The last two upwards trends reached extreme. Since the high on the 16th of January downwards movement has brought ADX down from extreme. There is again room for a trend to develop.

This market currently looks range bound. Resistance is about 0.8650 and support is about 0.8450. The bottom line is a breakout would be required before any confidence may be had that this market is trending.

ELLIOTT WAVE ANALYSIS

MONTHLY CHART

EURGBP Chart Monthly 2017
Click chart to enlarge.

The large downwards wave labelled Super Cycle wave (II) will not fit as a five wave structure. It will only fit as a three. This may be the end of the bear market.

The upwards wave labelled cycle wave I looks like a very good five wave impulse. It should be expected to reasonably be followed by a three wave down movement for a second wave correction, which is most likely to end close to the 0.618 Fibonacci ratio.

DAILY CHART

EURGBP Chart Daily 2017
Click chart to enlarge.

C has not yet moved beyond the end of A to avoid a truncation. The target has a good probability.

While classic analysis is not very bearish, this Elliott wave count is.

Use the lilac line for resistance.

Volume analysis:

The strong volume for the last session of the 21st of February supports this wave count. The fall in price is supported by volume here as a third wave should be.

On Balance Volume is giving no signal, either bullish or bearish.

DISCLAIMER

As always, it is essential that anyone using this analysis for trading advice manages risk carefully. Follow my two Golden Rules:

1. Always use a stop.

2. Never invest more than 1-5% of equity on any one trade.

Trading is about probabilities, not certainties. Failure to follow my two Golden Rules of trading indicates failure to manage risk.

Accept that this analysis may be wrong. It is impossible for any analyst to predict with certainty what a market will do next.

This analysis is published @ 12:10 a.m. EST on 22nd February, 2017.

The Trading Room – 15th February, 2017

Today’s Trading Room looks at Natural Gas and USDJPY.

To learn what the Trading Room is about see first Trading Room analysis here.

Trading Room will focus on classic technical analysis. Elliott wave analysis will be for support and for targets / invalidation points.

Natural Gas – NGAS

TECHNICAL ANALYSIS

NGAS Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

In the mid term, there is a new downwards trend for Gas. Use the Magee trend line for resistance.

In the short term, price may bounce up here from the 200 day moving average. The slight decline in volume for the last two days, along with small range days, looks like bears are temporarily exhausted. Expect a bounce as fairly likely.

This chart looks very bearish.

Trading advice for members only: [Content protected for Elliott Wave Gold members only. To subscribe click here.]

ELLIOTT WAVE ANALYSIS

WEEKLY CHART

NGAS Chart Weekly 2017
Click chart to enlarge.

The trend channel about cycle wave b has been breached now at the weekly and daily chart level. This may offer some confidence in a trend change.

DAILY CHART

NGAS Chart Daily 2017
Click chart to enlarge.

Cycle wave b may be complete. A cycle wave c down may be in the early stages. This wave should last one to several years if the wave count is correct. The lower edge of the channel about cycle wave b is now breached by two daily candlesticks.

Look for bounces to find resistance at the Magee trend line.

I do have an alternate wave count, but it too is bearish at this time. Publication of it would add nothing to the analysis. If any member wants it, then please email me and I’ll send it to you.

USDJPY

TECHNICAL ANALYSIS

USDJPY Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Price has moved upwards, as expected, since last publication of analysis of this pair. There is now a full daily candlestick above the blue line, which previously provided resistance and may now provide support.

Trading advice for members only: [Content protected for Elliott Wave Gold members only. To subscribe click here.]

ELLIOTT WAVE ANALYSIS

USDJPY Chart Daily 2017
Click chart to enlarge.

This market is behaving as expected so far. Elliott wave targets may be used as profit targets.

DISCLAIMER

As always, it is essential that anyone using this analysis for trading advice manages risk carefully. Follow my two Golden Rules:

1. Always use a stop.

2. Never invest more than 1-5% of equity on any one trade.

Trading is about probabilities, not certainties. Failure to follow my two Golden Rules of trading indicates failure to manage risk.

Accept that this analysis may be wrong. It is impossible for any analyst to predict with certainty what a market will do next.

This analysis is published @ 12:35 a.m. EST.

Natural Gas Elliott Wave Technical Analysis – Video – 16th Jan, 2017

Natural Gas Elliott Wave Technical Analysis – 16th January, 2017

Summary: Natural Gas is in an upwards trend. The last correction ended at support on the 9th of January. The target for upwards movement to end is about 4.304.

MAIN ELLIOTT WAVE COUNT

WEEKLY CHART

Natural Gas Elliott Wave Chart Weekly 2017
Click chart to enlarge.

This weekly wave count for Natural Gas begins at February 2014 candlestick. Data from BarChart does not go back in history far enough to begin the count earlier.

From February 2014 candlestick, a large downwards wave is complete to the low on February 2016. This subdivides neatly as a five wave impulse. If this piece of the analysis is correct, then it should be followed by a three up that may not make a new high above 6.489.

This main wave count sees the three up as incomplete. It should be expected that this main wave count is more likely while price remains within the Elliott channel. Assume the trend remains the same until proven otherwise.

DAILY CHART

Natural Gas Elliott Wave Chart Daily 2017
Click chart to enlarge.

Cycle wave b is seen as an incomplete zigzag. So far, within the zigzag, primary waves A and B are complete. Primary wave C is incomplete and continuing upwards.

So far only intermediate waves (1) and (2) are complete within primary wave C. Intermediate wave (2) is a common expanded flat correction. This wave count now expects to see an increase in upwards momentum as a third wave for intermediate wave (3) unfolds.

A target for intermediate wave (3) is not calculated because it does not fit with the higher target of primary wave C.

Within intermediate wave (3), no second wave correction may move beyond the start of its first wave below 3.099. If this main wave count is invalidated, then the alternate below would be used.

ALTERNATE ELLIOTT WAVE COUNT

WEEKLY CHART

Natural Gas Elliott Wave Chart Weekly 2017
Click chart to enlarge.

This wave count is identical to the main wave count up to the end of primary wave B within cycle wave b.

It is possible that primary wave C is a complete five wave impulse, which means it is possible that cycle wave b is over.

DAILY CHART

Natural Gas Elliott Wave Chart Daily 2017
Click chart to enlarge.

Primary wave C must be seen as a complete five wave impulse. To do that it does not have as good a look as the main wave count for this piece of movement.

A new high above 3.903 would invalidate this alternate wave count and that would add confidence to the main wave count.

TECHNICAL ANALYSIS

DAILY CHART

Natural Gas Elliott Wave Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Natural Gas is in an upwards trend. The short term average is above the mid term, which is above the long term. At this stage, all three averages are pointing upwards.

ADX disagrees though. It is declining, indicating the market is consolidating and not trending. Price has been constrained within a large range from about 3.105 to 3.705, areas of prior strong resistance and support.

The upwards trend reached an extreme level at the high on the 9th of December with ADX above 35 and above both the directional lines. Thereafter, price has moved sideways in a large range. This has dropped ADX down to the low 20s, giving room again for a trend to continue.

While ADX remains pointing downwards, one approach to this market would be to use support and resistance lines on price in conjunction with Stochastics to indicate when each swing ends and the next begins. At this time, price has turned up from support and Stochastics has turned up from oversold. It is reasonable to expect price to continue overall upwards from here to reach resistance. If Stochastics reaches overbought at that time, then the upwards swing may end.

Two of the three last upwards days show some increase in volume. This supports the idea that price may continue higher at least to resistance here.

Price has turned up after reaching the extreme lower edge of Bollinger Bands. With price now at the mid line of BBs, watch it carefully here. This may offer resistance.

Finally, the strongest piece of technical analysis here is On Balance Volume. The break above the purple resistance line should be taken seriously. This is a bullish signal. OBV often leads price when using trend lines.

This analysis is published @ 12:55 a.m. EST on 17th January, 2017.