Energy

Major Nat Gas Reversal Continues, Defines New S-T Bear Risk

Posted 07/01/2022 2:02PM CTRJO Market Insights

Yesterday’s impulsive break below last Fri’s 6.062 low reinforces our major peak/reversal count introduced in 09-Jun’s Technical Blog and leaves Wed’s 6.833 high in its wake as the latest smaller-degree corrective high this market is now required to recover above to confirm a bullish divergence in daily momentum, arrest the past month’s slide and expose what we would then believe is a B- or 2nd-Wave corrective rebuttal higher within this major peak/reversal PROCESS.  Per such, this 6.833 level serves as our new short-term but key risk parameter from which both short- and longer-term players are advised to rebase and manage the risk of a bearish policy and exposure.  In lieu of such strength, the trend remains down and should not surprise by its continuance or acceleration with former 6.06-area support considered new near-term resistance.

From a long-term perspective, the major peak/reversal factors include:

  • a confirmed bearish divergence in weekly momentum amidst
  • historically frothy levels in the Bullish Consensus (marketvane.net)
  • an arguably complete and massive 5-wave Elliott sequence from Jun’20’s 1.517 low and
  • an “outside MONTH down” in Jun higher high, lower low and lower close than May’s range and close).

This is about as extensive and compelling a list of technical facts and observations as exists and warns that the 2-YEAR secular bull is over.  To negate this count, all the market has to do is recover above 08-Jun’s 9.664 high in the then-prompt May contract.  An interim challenge however would be a countering B- or 2nd-Wave corrective rebuttal to the past month’s collapse that could be extensive in terms of price and time.  And herein lies the importance of Wed’s smaller-degree but key corrective high and short-term risk parameter at 6.833, the recovery above which would expose such a rebound.

These issues considered, a bearish policy and exposure remain advised with a recovery above 6.833 required to expose a potentially extensive corrective rebound that would warrant moving to a neutral-to-even-cautiously-bullish stance for an interim rebound.  In lieu of such 6.833+ strength, further and possibly steep losses remain expected.

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