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Energies

Trail S-T Nat Gas Bull Risk

Posted 09/16/2019 10:47AM CT | RJO Market Insights

Overnight’s continuation of the past few weeks’ impressive, impulsive rally above last week’s 2.648 high reaffirms our developing bullish count and leaves Thur’s 2.512 low in its wake as the latest smaller-degree corrective low the market is now minimally required to fail below to even defer, let alone threaten the bull.  Per such this 2.512 low is considered our new short-term risk parameter from which shorter-term traders with tighter risk profiles are advised to rebase and manage the risk of a still-advised bullish policy.

Whether or not the market fails below 2.512, we believe an eventual 5-wave Elliott sequence up from 05-Aug’s 2.045 low will be realized per our major base/reversal count introduced in 29-Aug’s Technical Blog.  

Our long-term base/reversal count remains predicated on:

  1. 29-Aug’s bullish divergence in momentum that defined
  2. 05-Aug’s 2.045 low as the END of a textbook 5-wave Elliott sequence down from 19-Mar’s 3.000 high shown in the weekly log chart above amidst
  3. historically bearish 11-YEAR LOW levels in our RJO Bullish Sentiment Index of the hot Managed Money positions reportable to the CFTC and
  4. the market’s total rejection of the lower-quarter of the past 10-YEAR range shown in the monthly log chart below.

This is a unique and compelling list of technical facts that warns of a base/reversal count that could be major in scope and potentially similar to the scope of previous intra-range rebounds over the past 10 years.  Within such a broader base/reversal count however, the monthly chart below shows a ton of former price action from the 2.53-to-3.90-area that should not surprise as a resistance threat in the weeks and months ahead.  Herein lies the importance of tight but objective risk parameters like 2.512.

In sum, a bullish policy and exposure from 2.280 OB recommended in 29-Aug’s Trading Strategies Blog remain advised with a failure below 2.512 required for shorter-term traders to take profits and move to the sidelines in order to circumvent the depths unknown of a larger-degree correction lower.  In lieu of such weakness, further gains remain expected.

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