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Natural Gas Futures (NG)

Natural Gas Futures (NG)

Update 05/09/2016NG 11-16_daily9_5_2016NG 11-16_daily9_5_20162

NG 11-16_daily9_5_20163

Update 28/02/2016

Gas found excellent resistance at the 20 week FLD and turned into an epic short. It was so bearish that the proposed 40 week cycle back in December 2015 was also breached.

I am expecting an 80 day bounce imminently here and a cross of the 10 day VTL should be a good entry. The scenario is a bearish underlying trend but a sharp bear market rally is in the pipeline. Perhaps back up  to the 2 area before finding resistance at the 80 day FLD.

Update 25/01/2016

The 40 week cycle low in Gas arrived a little early but it certainly did arrive in style. In just over 20 days this commodity rallied over 40%. I have shown the 20 week FLD on the chart below to demonstrate a good example of how price interacts with FLDs depending on the context of the underlying trend. In this case I was actually able to short the rise on a touch of the 20 week FLD as the underlying trend is hard down. Sure enough price touched the and reversed pretty much bang on the 20 week FLD. Powerful squiggly lines those FLDs…

In the near term there should be a 40 day cycle bounce happening now. If price once again comes up to the 20 week FLD and is in the timeframe for a short I may well take it again. A less risky option is to wait for a cross of the 20 day FLD to the downside in what would be an ‘F’ category interaction. Price will then make it’s way to the first of 4 80 day cycle lows in this current 40 week. Gas is one of my favourites and has been for some time. If it continues to phase well with a standard model trough based analysis there is a chance for a massive low later in the year.

NG 03-16_daily_1_25_2016

 

Update 30/11/2015

T2 targets were hit out of the 80 day bounce to the upside and profit was taken. Price then collapsed into what is an imminent 40 day cycle low, expected around now. This will be the FINAL 40 day cycle low before a large trough of 40 week magnitude is anticipated at the end of December. Here is the chart:

NG 02-16_daily_30_11_2015I will not be taking this long opportunity (an ‘E’ category) because of the underlying bearish trend. However I will be looking to short this instrument again around the middle of December. A good place may well be the 80 day downward VTL, detailed on the chart above. However I will pay close attention to any 40 day FLD resistance at this stage. After that we can look forward to a profitable long chance out of the 40 week low.

Update 02/11/2015

The 20 week cycle looks to have occurred earlier than expected and with a significantly weaker bullish outcome. Price has moved down with some force taking out the earlier 54 month low, made back in 2013,  confirming the underlying bearish trend. We are in the final 18 month cycle of a 54 month cycle so the trend is down for several months longer according to this phasing. However, as in every market, there are chances to profit from a bear market bounce.

NG 12-15_daily_03_11_2015A 40 week cycle low lies ahead. However, before that particular low there is an opportunity to get long from the upcoming 80 day cycle bounce. An aggressive entry is via a cross of the 10 day FLD to the upside. A more conventional entry would be on a cross of the 20 day FLD with a target at T2 to be met and profit taken, given the underlying trend is bearish. In the FLD trading strategy this would be a category ‘A’ interaction. I expect 2500 to be tested and then price to move down further.

Subsequent to this trade I will be looking for a short entry as we move down into the 40 week cycle low, due late December or early next year.

Update 30/09/2015

Looks like the analysis suggesting this was only a 40 day cycle bounce was correct, price has taken out the low and I am out of the long position. Worth taking a short perhaps…

Update 28/09/2015

Trading the Natural Gas Futures is not for the faint hearted. It has consistent choppy and sometimes illiquid price action but nonetheless traced out excellent trough to trough cycles recently and in the past. I held the ‘D’ category interaction as described in the last update and price hit the 2640 target in late August.

After that there was a move up in a very choppy fashion that could possibly be an early ‘A’ but more likely a ‘G’ category. Using the latter, more probable, scenario the next move coming up should be a strong bullish move from the 20 week cycle trough, centred around this week.

Price has already broken higher as I type and I am long on a cross of the 10 day FLD to the upside. I will hold for the 20 day FLD target with half an eye on the analysis above that suggests this may be a 40 day cycle low bounce. Remember the longer underlying trend is down but cyclic math allows for bullish moves to occur that can be quick and profitable.

NG 10-15_daily_28_09_2015

Update 18/08/2015

After Natural Gas Futures just missed its ‘A’ category target of 2968, specified in the last update, alarm bells should have been at least ringing quietly. The first move out of an 80 day cycle is expected to exceed it’s 20 day FLD target to the upside, especially as this is only the 2nd 80 day after the 18 month low back in late April. The ‘C’ category interaction was profitable though, achieving it’s target, just.

Failure to hit this ‘A’ target and just meeting the ‘C’ target means the underlying trend of larger cycles is probably down. Indeed as the long term analysis suggests we are in the final 18 month cycle of a 54 month cycle (3:1 ratio) this failure of longside targets should not come as that much of a suprise to a seasoned Hurst trader. The fact that this may well also be the final 18 month cycle of a 9 YEAR cycle (2:1 with 54 month cycle) will also exert downward pressure.

Moving onto the immediate picture there has been a large move down into what will be the 40 day cycle low, due in the next few days. Target for this ‘D’ category short is 2640. I will possibly hold for a move down into the 20 week cycle low which may well breach the low in April. That would be pretty bearish and make gas very cheap until late next year.

NG 10-15_daily_18_08_2015

Update 15/07/2015

Price moved up in an ‘A’ category interaction with the 20 day FLD and the T2 target is 2968. I expect this to be overshot as this is the first move of this 2nd 80 day cycle in the 18 month cycle. I took a long position on the move above the 10 day FLD back on the 10th and will take profit at the 20 day FLD target above.

NG 08-15_daily_15_07_2015

Update 08/07/2015

Gas continues to trace out a nice 80 day cycle, the first of this current 18 month cycle which bottomed back in late April. There should be a few more days of down movement in this future before a bounce upwards in an ‘A’ category interaction with the 20 day FLD. I will be taking this trade and expect it to break the highs of the first 80 day cycle, made back in mid May. Entry points for a long are on a cross of the 10 or 20 day FLD or for a more conservative approach when the 40 day VTL is broken (blue downwards line). I will update with interim targets when they are confirmed.

NG 08-15_daily_08_07_2015

Update 16/06/2015

Natural gas continues to show outstanding cyclic structure with a strong move out of the 40 day low. Price overshot it’s T2 target by a wide margin indicating the underlying trend has turned bullish for the meantime. This looks good for a continued move out of the 18 month trough. A long out of the next 80 day low, due mid July, would be wise.

NG 08-15_daily_16_06_2015

Update 05/06/2015

Worth having a quick look at Natural Gas which I don’t usually trade but it has been following some excellent trough to trough phasing according to the nominal model described originally by JM Hurst. Looking at the long term picture below I believe there was a 54 month trough back in April 2012. Price has struggled really to get out of this low area following the large decline from the previous 54 month cycle low way back in July 2007. There was a fairly strong runup after the first 18 month trough of this particular 54 month cycle (3 to 1 harmonic ratio) which started in November 2013 but aside from that it is generally sideways. Price then moved down in a bearish manner to what is possibly the 2nd 18 month trough, occuring very recently on April the 27th 2015. Of note are the average cycle lengths here: 80 day is 68.3 (nominal 68.2), 20 week is 19.2 weeks (nominal 19.5), 40 week is 39.4 weeks (nominal 39.9) and the 18 month comes in at exactly 18 months (nominal 17.3). These kind of small fractional variations from the nominal average give me confidence in this particular phasing.

NG 08-15_daily_05_06_2015

Moving into the shorter timeframe below the most recent 18 month is shown. Looks good for the A and B to C categories. The D category would have been a great short here, overshooting its target into the 40 day trough. Crucial question now is will the 18 month trough be breached in only the first 80 day cycle? I doubt it, it would be extremely bearish. A long on a cross of the 20 day FLD to the upside might be wise, I will watch this one for now.

NG 08-15_daily_05_06_20152

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