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Is Natural Gas Ready For An April Rally

Our researchers have been following Natural Gas for many months and believe the current price level, near $1.65, is acting as a continued historical support level (a floor in price).  Our researchers also used one of our data mining tools to attempt to identify if any opportunity exists in NG over the next 30 to 60+ days for skilled traders.  The purpose of this data mining tool is to explore historical price activity and to determine if there is any true price “bias” that exists within certain months.

For example, if we could determine that Natural Gas tends to rally in April by a 2:1 ratio (historically) and that the rally in NG is typically somewhere between $0.50 and $1.50 to the upside, then we could attempt to use this information to set up a trade that allows us to attempt to profit from this potential future trend bias.  A 2:1 ratio would indicate that, historically, the price rallied 10 times and didn’t rally 5 times over a span of 15 instances.

Our data mining utility reported the following data for April, May, and June in Natural Gas.

MONTHLY NATURAL GAS PRICE CHART

If we look at the APRIL data, the POS bars = 17 and the NEG bars = 8 – that sets up a slightly greater than 2:1 ratio of advancing price over declining price in April.  The “Total Monthly Sum” across 25 instances of data is $1.12 whereas the Average for the POS price activity comes to just $0.24.

This suggests that in April, we have a fairly high opportunity for some upside price activity in Natural Gas based on this data – a nearly 2:1 advancing price ratio (historically).  Yet it also means that advancing price may only rally $0.35 to $0.75 from any price bottom – so we have to be aware of risks that may exists with a small price advance from the current low levels.

If we take a look at the MAY data, the POS bars = 13 and the NEG bars = 11 – that sets up a 1.18:1 ratio that suggests a very slight advantage to the possibility that continued upside price activity will happen in May.  Yet, the upside price advantage shown my the “Total Monthly Sum” data suggests a very big opportunity for a breakout rally in May (+$2.40).  The way I interpret this data is to understand that May is roughly 60/40 biased to the upside whereas if any upside move takes place in April, a continuation of that trend in May could be incredibly profitable with a proper strategy.

Take a look at the JUNE data and try to come up with an interpretation yourself.  The POS bars / NEG bars represent a less than 1:1 ratio.  The Total Monthly Sum ($0.21) is not a very substantial price advance.  The data is somewhat indecisive or inconclusive in suggesting any real price advantage in June for trading.

Yet, we have a very clear advantage in April and May.  So, how are we going to approach this trade setup?

WEEKLY NATURAL GAS CHART – CYCLES & SUPPORT

Currently, NG is testing very deep price levels within the BLUE support range box.  Aggressive traders can attempt to look for opportunities within this range but must understand risks are still high for continued moderate price decline before a bottom sets up in April.  Skilled traders would wait for the bottom to set up and possibly look for opportunities in ETFs as a means to limit risks on initial positions – attempting to scale into the trade comfortably.

Once the rally in NG really sets up and breaches the $1.98 level moving higher, then we believe we have a very real rally on our hands that may see price levels back above $2.75 eventually.  The $1.85 to $1.99 price level will act as resistance as price attempts to move higher.

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Why are these types of setups so important to skilled traders?  Historical price structures and patterns, like this data mining pattern, help to clearly illustrate strategic advantages in certain markets for skilled traders. Determining how to set up a proper trade knowing this data is also important.  Risks exist with every trade you make and I’m sure we’ve all learned a lesson or two about making a hasty trade and not thinking about it?

Our research team believes April and May 2020 could be very exciting for Natural Gas.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

Natural Gas Reloads For Another Price Rally

As a technical trader, one has to really learn to appreciate when a trade “reloads” for another move higher.  Much like the Gold base/bottom in April 2019 below $1300 that we called back in October 2018.  When a trend confirms and we can see the potential for upside profits, but price performs a “deep pullback” withing that initial trend setup – it is almost like we’re dreaming.

After the downside rotation in Gold setup in April 2019, the next move higher pushed Gold prices up to $1550 from levels near $1275 – what a great move that was.  Now, imagine Natural Gas may give us another chance to get long below $2.30 with an upside target near $3.00 before mid-November?  Incredible – right?

Read our original research post here : https://www.thetechnicaltraders.com/has-the-basing-setup-in-natural-gas-completed/

Here it is, folks.  After setting up a very deep price base in August 2019, Natural Gas has, again, moved back into the basing zone and our historical price research still suggests October and November will be strongly positive for Natural Gas.  We believe the upside potential in Natural Gas could target $3.00 fairly quickly – possibly before mid-November 2019.

THIS DATA IS QUOTED FROM OUR ORIGINAL RESEARCH POST…

“Our research tools suggest that September has a 65% probability of rallying more than 6x the historical range.  This would suggest a rally potential of more than $2 exists in September for Natural Gas.  Our tools also suggest that October has a 75% probability of rallying more than 3.2x the historical range.  This would suggest a potential rally of more than $1.20 in October. “

DAILY NATURAL GAS CHART

WEEKLY NATURAL GAS CHART

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This Weekly Natural Gas chart highlights the “bump” in price that happened in September and how price has fallen back into the basing zone.  It is almost as if the market forgot what Natural Gas should be doing, historically, at this time of the year.  Well, who cares.  If the markets are going to give us another chance at a +30% price rally – we’re not going to miss the opportunity to buy within the basing zone.

Our opinion is that any opportunity to buy below $2.40 is an adequate entry level.  Ideally, try to wait for levels below $2.30 if possible.  This new basing zone pricing may not last very long, so try to take advantage of lower prices when possible.  Ideally, the upside potential for this move should be fairly easy to target given the historical price patterns that consistently drive Natural Gas higher in October and November.

CONCLUDING THOUGHTS:

As skilled traders, we have to learn to take advantage of when the markets provide us with these extreme opportunities and setups.  We believe any upside move above $2.75 to $2.80 would be a suitable outcome for this extended basing pattern.  Gutsy traders could attempt to hold for levels above $3.00 – but we’re not confident that extreme price level will be reached quickly.

One thing most traders don’t understand is that the extreme winter weather that just hit the US and Canada last week could be a fairly strong indicator of early demand for heating oil, natural gas and other consumer energy products as an early winter may be setting up.  Either way, we believe this setup is a gift for skilled technical traders – don’t miss out.

As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.

Be sure to ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a Free 1oz Silver Round or Gold Bar and SPECIAL OFFER – CLICK HERE

I can tell you that huge moves are about to start unfolding not only in metals, or stocks but globally and some of these supercycles are going to last years. This quick and simple to understand guide on trading with technical analysis will allow you to follow the markets closely and trade with it. Never be caught on the wrong side of the market again and suffer big losses. PDF guide: Technical Trading Mastery

Chris Vermeulen
www.TheTechnicalTraders.com

Markets Are Setting Up A Shake-Out – Be Prepared

Now that the April 21 ~ 24 Gold “momentum base” prediction that we’ve been discussing for the past 4+ months has past and appears to be accurate, we think it is time to start warning of increased market volatility and the potential for a market “shake-out” to happen.  Last week was a key component to our future price predictions and market projections.  We believed our proprietary price modeling systems were accurate and had latched onto a key component of the markets – the “momentum base” call in Gold for April 21 ~ 24 of this year.  Remember, this original research post was made in September 2018 – over 7 months ago.  We kept refining our research over the past 4+ months and warned, repeatedly, that this base in Gold would likely prompt a market shake-out over the next 30~60+ days.

The moves in the major markets, over the past few weeks, have been very telling.  With the SPY and NASDAQ pushing to new all-time highs, strong earnings (overall) and the global markets setting up for another shoe to drop (at some point in the future), it leaves many questions for skilled traders.  What’s going to happen next and what should we expect from price?

Well, we have a few simple answers for you regarding the next few weeks expectations as well as some bigger future predictions.

First, Crude Oil rotated dramatically lower on Friday.  This was a big downward price rotation considering the Trump/Iran deal stance early on in the week.  A disruption in the supply of Oil is often a driver of bigger market swings.  I learned a long time ago to watch Gold and Oil all the time.  These are often the leading commodities that reflect fear/greed in the markets and potential global unrest.

With Crude Oil slipping below a key Fibonacci trigger level (at $65.25) and another key Fibonacci trigger level sitting at $61.60, it seems rather obvious that Oil may slip back below $60 on deeper price rotation over the next few weeks which could lead to a bigger “shake-out” in the markets.  We recently posted an article about how Oil could rotate lower and retest the sub $55 level (https://www.thetechnicaltraders.com/oil-may-be-setup-for-a-move-back-50/ ).  At this point, a breakdown of oil prices below the $61.60 level would indicate the very strong potential for further downside price.

 

Precious metals have setup our momentum base/bottom on the dates we predicted over 4+ months ago (April 21 ~24).  It is incredible that our ADL price modeling system can be so accurate so far into the future.  Our proprietary price modeling systems provide us with an incredible advantage over most other research firms.  The ADL and Fibonacci price modeling systems are predicting an upside price advance of at least 12% to 20% over the next few weeks.  Read one of our original research posts here: https://www.thetechnicaltraders.com/45-days-until-a-multi-year-breakout-for-precious-metals/

The upside price potential in precious metals should not be overlooked.  Additionally, the implication that some other global market malaise could unfold between now and the end of 2019 to drive precious metals prices even higher is fairly strong.  We’ve been warning that Europe, China, and even the US markets could come under some pricing pressure or increased volatility as the US markets establish new price highs.  It makes sense that traders would be preparing for another deep price rotation as prices near previous peak levels.

 

The Transportation Index rotated downward near the end of the week quite hard. Thursday, April 25, saw the Transportation Index fall over -250 pts (over -2.25%) after briefly breaching a key resistance level near $11,050.  As we’ve been suggesting, the Transportation Index typically leads the markets by a few week/months and we follow it as a means of understanding future trends, risks and price rotations.  Right now, the Transportation Index is suggesting increase price rotation and price volatility is likely to “shake-out” the markets for a while.

 

Lastly, the YM (Dow Futures), is setting up in a very narrow price channel below the recent all-time high established in early October 2018 (at $26,966).  This decreased price volatility suggests that the US major indexes are setting up for a price breakout move.  Congesting price channels suggest that price is stuck within a defined price range/channel and the ultimate breakout move will likely be a big breakout move to one side or the other.  We have our suspicion as to which direction the move will likely be and we’ll share it with you now.  Our longer-term analysis suggests that price will continue to push higher while attempting new all-time price highs.  Our expectations that price volatility will increase throughout the rest of 2019 suggest we could see some very big price swings over the next 7+ months.  But for right now, we believe this YM price channel will result in a brief upside price breakout that will push the YM price to new all-time highs (briefly) before retracing to form another extended sideways price channel near $27,000. Stocks, in general, are doing well as all our positions rallied last week with one stock jumping over 11% in one session.

 

Below, we have included a Daily YM chart that highlights this current price channel in MAGENTA.  Pay very close attention to this channel as we near the eventual price breakout that will end this congestion.  Weakness may prompt a “false breakout” to the downside, suckering in shorts, before a continued upside rally pushes prices over the $27,000 market, then stalling to set up the next Pennant/Flag formation.  We’ve seen this type of price action many times in the past.  Any downside “false breakdown” would prompt a big increase in volatility.  This aligns with our broader market analysis.  The push to the upside to establishing new all-time highs also aligns with our broader market analysis.  Thus, we expect a pretty big series of price events to unfold over the next 2~5+ weeks.

 

If you like our research and want to learn how we can help you find and execute great trades, please visit www.TheTechnicalTraders.com.  Get ready for the next big moves and learn how our team of skilled researchers and traders can help you stay ahead of these market moves.

Chris Vermeulen
www.TheTechnicalTraders.com

 

Financials Setting Up An Island Top Formation

As we continue to scan the charts for setups and trigger to alert our followers, we’ve come across a setup that may be more ominous than what it appears.  Recently we’ve posted articles about how the SPY and the NQ have pushed into new all-time high price territory and how Gold is setting up for a momentum base that should launch precious metals to near highs.  We’ve also discussed how we believe the current upside price bias in the US stock markets should last another 10~35+ days before new price weakness sets up – possibly pushing prices lower in late May or early June 2019.

Our research team has been scanning the charts looking for anything that could give us an edge to the potential setup for this price weakness in the future.  We believe the Transportation Index and the Financials could be keys to understanding how far the upside rally can continue and when a price peak may begin to warn of a potential price top or rollover.

An Island Top is a pattern that sets up with an upside price gap followed by sideways price action above that gap.  In theory, this type of setup should promote the gap to be filled with downside price action before any further upside price move can continue.  Although, gaps to the upside are fairly common in strong uptrends.  Given the strength of the earnings data released early this week and the expectations that we have for some continued upside price bias over the next 10~35+ days, we are watching these Island Top formation in the Financials for any signs of weakness to alert our followers.

This Daily FAS chart highlights the GAP as well as the Resistance levels that are currently acting as a ceiling.  A breakout above the resistance level would indicate that we have more room to run higher.  Any failed breakout to the upside, where price briefly rallies above the resistance level, then falls back below it, would be a pretty strong indication of a rotational peak.  The Financials could fall 10% from current levels and still be within the range of the March/April lows.  It would take a much bigger move to qualify as a breakdown bearish trend.

 

This Daily XLF chart highlights a similar pattern to the FAS chart.  The key element of the XLF chart is that the Resistance level provides more key fundamental price peaks than the FAS chart.  On this XLF chart, we can see that the current Resistance level aligns perfectly with the Nov/Dec 2018 highs.  We can also see a short GREEN Fibonacci trigger level line in early March 2019 above the Resistance level.  That Fibonacci trigger level is still valid and any move above that level would constitute a new bullish price trend trigger.

Any failure to break the Resistance level would qualify as a price rotation to fill the GAP and potentially set up a move back to near $25 looking to find new support.  Overall, the Financials are poised for a move – up or down.  Our research suggests the US stock market is not done rising, thus we are concerned that certain sectors may begin to show signs of weakness as the broader market continues to rise.

 

Our research team believes a critical peak formation is likely near the end of May or in early June 2019.  It is because of this belief that we are warning traders to play the next 15~25+ days very cautiously.  Watch the Financials, the Transportation Index, the US Dollar, and Precious Metals.  We believe any early signs of weakness will be found within these symbols.

With a total of 55 years of technical analysis and trading between Brad Matheny, and myself Chris Vermeulen, our research and trading signals makes analyzing the complex and ever-changing financial markets a natural process. We have a simple and highly effective way to provide our customers with the most convenient, accurate, and timely market forecasts available today. Our stock and ETF trading alerts are readily available through our exclusive membership service via email and SMS text. Our newsletter, Technical Trading Mastery book, and Trading Courses are designed for both traders and investors. Also, some of our strategies have been fully automated for the ultimate trading experience.

Chris Vermeulen

Our April 21~24 Gold Call Is Here

One of the most important things about making calls about any future price movement is to have confidence in your research team and systems.  The second most important thing is to make these calls public so everyone can see if you were right or wrong about your predictions.  Predicting the future, often many months in advance, is not an easy task.  We like to ask people, how many people do you know that can predict something in the future, almost to the exact day, and find they were accurate more often than being wrong?

Well, this is the time we’ll see if our predictions are accurate or not.  Back in October 2018, we issued a research post indicating that Gold would rally above $1300, then stall, then set up a momentum base between $1260 and $1275 near mid-April or early May.  Here is a link to that public post: https://www.thetechnicaltraders.com/45-days-until-a-multi-year-breakout-for-precious-metals/

In February/March 2019, our research team honed in on the April 21~24 dates as a key cycle date for a very likely momentum bottom setup.  You can read our research here.  We believe these dates will be key to the future rally in Gold and they may very well be the last time we see sub-$1300 price levels for a while, but gold does need to reverse to the upside this week.

Currently, Gold is trading at $1278.10 with a recent low at $1273.  Remember our original prediction that the momentum base would likely setup between $1260 and $1275?  Right now, we believe this Momentum base is setting up exactly as we predicted back in October 2018 – over 6 months ago.

As we continue to watch this Momentum Base setup play out, we urge skilled traders to watch the outlying symbols for signs of confirmation and validation.  The news about the Iran Oil Sanctions, today, may become a key element going forward – but it is too early to tell right now.  We believe some global economic event will drive prices of Gold much higher over the next 30+ days.

Gold has moved lower over the past 30+ days from the $1340 level down to near the $1270 level – just as we predicted as well.  The timing of this recent downswing in price is perfect for our April 21~24 Momentum Base call.  We do believe there is still a chance that a $1255 to $1260 level may be seen this week or next.  The Momentum Bottom/Basing formation may form over a 7 to 10+ day range.  So, pay attention to these opportunities in Gold over the next few days and weeks.

NUGT (3x gold miners bull ETF) continues to fall as Gold Bases.  In fact, NUGT has fallen to levels that we have not seen since January 2019.  The reality of the matter is that NUGT may be the best confirmation tool/symbol we have right now for timing the end of our Momentum Base in Gold.  When NUGT rotates higher and forms the base, it will very likely mark the end of weaker prices for the entire precious metals sector and the beginning of the upside price rally we have been predicting.

As our research team likes to state – this is “do or die” time with regards to our predictions from many months ago.  We’ve stuck by them for months, telling anyone who would listen this setup would be the last time you see sub-$1300 levels in Gold for many months – possibly years.  If our analysis is correct, we suggest you pay attention to these symbols and lower Gold price levels right now.  Once this move begins to rally, it could take the markets by surprise.

Our expectations are that by mid-May, or so, we should already be in an upside price swing that should be targeting the $1450 to $1550 level.  This means we have about 7 to 15 trading days until we start to see some real upside price move in precious metals.

We should remind you that gold needs to find a bottom this week and price could become choppy and volatile.

Get ready and follow our research.  How many other research firms do you know that are capable of calling the markets 6+ months in advance with this type of accuracy?

Please visit www.TheTechnicalTraders.com to learn how we can help you find and execute better trades for your future.

Chris Vermeulen