NatGas Heads Lower on Strength. Due to Stubbornly high Production, Supply.
KOLD is a 2x ETF Inverse of Bloomberg Natural Gas Subindex futures index on Natural Gas. KOLD is likewise a popular ETF used by traders positioning SHORT on Natural Gas.
Fundamentals suggest stubbornly high production and injections to already high NatGas inventories will keep downward pressure on Nat Gas prices. In concert, KOLD will continue higher to complete Elliott Wave 5 of 5 shown in the chart.
Whooph heeds equity and commodity fundamentals but since 1999 he’s studied all sorts of divergences revealed between Price and Indicator highs and lows. His niche: Divergences between what’s measured, speed and momentum of Price v. the Indicator doing the measuring. Why? Repeatability of trade income via predictive market signals which markets cannot hide.
George Lane puts it:
Price has MOMENTUM.
Indicators do NOT.
Hence, predictive inferences exist.
Via smart reads on Indicators v. Price reveals why Lane makes this cryptic statement, an endorsement on his STOCHASTIC oscillator invention, Whooph offers predictive commentary. Lane’s invention also apparently cut the workloads on his commodities futures trader cohorts down to…making coffee! Thank you, divergences!
When not trading futures, George Lane spent much of his time explaining to agitated analysts the reasons his Stochastic and other momentum tools for measurement can be predictive. eek. Like fingernails on a chalkboard to analysts, and other non-technicians. - Whooph
Corroborating bearish fundamentals, the KOLD chart below provided by Whooph shows NO weakness by indicators at Point 3, signifying end of Wave 3. Which suggests Wave 5 MUST follow. And then invariably MACD weakness will paint.
By then, NatGas traders we’ll be staring down the barrel of our NatGas’ heating season, often beginning as early as November. Depending on breadth and severity of Winter Freeze, NG freeze offs, Liquid Natural Gas (LNG) exports, and whatever geopolitical shenanigans, DEMAND for NatGas will hit.
Whooph expects to fade long on NatGas late October to early November. A bit too early to call it right now.
Charlie Whooph READERS:
Though you may not be interested in the Natty Gas dance, as it were, I strongly recommend the “lesson”. In this and other Whooph Trades lessons, discourse is NOT timed to markets or intended to recommend any BUY, SELL, STOP, or TARGET, by the way.
Lessons cover Markets & Waves, courtesy and thanks to Ralph Nelson Elliott, Price-Indicator Divergences or disagreement (HINT) which Whooph essentially coined, and proper analysis of the most popular indicators ie. Stochastic, MACD, Williams%, RSI, and Mean Averages.
Don’t worry, Whooph gives minimal credence to so-called over-sold, over-bought conditions and often violated trend lines. And he explains why.