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Is Natural Gas (Finally) Nearing a Two-Way Trade?


Below is what we discussed yesterday, and as it turns out, after Natural Gas hit a low at 2.608, last seen in Aug, 2012, it turned up, and has followed through to the upside to the 2.77 level so far today.

While I would be shocked if yesterday's low at 2.608 established the bear phase low, my work does suggest that a major low in Natural Gas is very close at hand.

Based on my pattern work, I am looking for one more decline that marginally violates 2.608-- into the 2.60-2.54 target zone prior to a powerful, conspicuous upside reversal that signals downside exhaustion in Natural Gas.

At this juncture, only a sustained climb above 2.96-3.00 resistance before a press to new lows-- will indicate that the low already has been put in. MJP 2/03/15

Another unconfirmed new bear phase low in Natural Gas today.

In the absence of any significant technical sign to the contrary, we have to expect prices to continue to slink still lower, but HOW MUCH LOWER?

Purely from a technical perspective-- ignoring the weather (which does not seem to matter much anyway this Winter), and ignoring whatever is ahead in the Weekly Inventory Reports-- Nat Gas finally has entered my "worst cast" target zone for the entire 18-month distribution topping edifice shown on the enclosed chart.

The optimal window from where to expect a significant upside technical signal is 2.72 to 2.26, within which, 2.65-2.45 is the anticipated narrower target zone from where Natural Gas will end its year-long decline, and begin to form a secondary bottom with its Jan-July, 2012, bottom between 1.90 and 2.75. MJP 2/02/15

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