Natural gas is at a tipping point

January 13, 201510 Comments

 

Somebody asked me to write a piece on the outlook for natural gas, so here goes:

The big picture is kind of “iffy” for gas right now. As seen on today’s chart–the spot price of gas may find support at the current $2.80-ish area—which lines up with the old neckline of its 2012 head and shoulders bottom. Should $2.80 (or so) not hold, the next stop brings us to the bottom of the shoulders at around $2.20.

The finesse indicators are not very positive. Moneyflow remains bearish, momentum indicators are oversold but not hooking up, and the environment for energy (oil) is not helping.

My two cents worth: Next stop, $2.20 unless something happens very soon!

nat gas short

 

Learn Technical Analysis – Hear Keith’s market and sector analysis for 2015!

I’ll be conducting a free technical analysis workshop at the Richview Toronto Public Library: 1806 Islington Ave, Toronto, ON M9P 3N3 – January 14, 2015 @ 7:00 PM. This may be my last library seminar for the winter, so if you live in the area – Come out and join the discussion!

10 Comments

    • check the bottom of each blog–its in relatively small print, but they are dated

      Reply
  • ON FRIDAY 9TH JANUARY, STOCKCHARTS MENTIONNED (ON WEEKLY UPDATE)THAT SPY-N PRICES SNAPPED BACK TOWARD SUPPORT ALONG THE BOTTOM OF A RISING WEDGE (AROUND 202.5) (1). IT HAD ME COME BACK TO CASH AND BUY TLT-N AND IEF-N AS A MEAN OF PROTECTION. ON THUESDAY 13 JANUARY, $SPX TESTED TRENDLINE SUPPORT THAT STRETCHES BACK TO THE MID-OCTOBER LOWS (1820). A BREAK OF THIS RISING LEVEL (2020-2025) OF SUPPORT COULD SUGGEST A POSSIBLE RETEST OF THOSE LOWS. IT SEEMS THAT WE ARE IN A CONSOLIDATION PATTERN WHILE WAITING FOR A CATALYST TO INFLUENCE FOR A DIRECTION. (GREEK LEFT PARTY HAS ONLY 30% OF CHANCE OF WINNING BUT MARIO DRAGHI ECB COULD MAKE A DIFFERENCE). IF DOCTOR COPPER IS OF ANY INDICATION, $USD SHOULD SOAR AND COPPER TO TRADE IN THE $2.00 ZONE (DESCENDING TRIANGLE FORMATION). SOUND TO ME LIKE THE JANUARY EFFECT…RIGHT?

    (1): STOCKCHARTS, ERIN HEIM “WEEKLY UPDATE”.

    Reply
    • Hi JP–
      January effect is more of a legend–ie it supposedly predicts the rest of the year. Allow me to quote from http://www.tradingsim.com (the data is a few years old, but it’ll do):
      When the S&P500 has a net positive gain in the first five trading days of the year, there is about an 86% chance that the stock market will rise for the year, it has worked in 31 out of the last 36 years (as of 2006). The five exceptions to this rule were in 1966, 1973, 1990, 1994, and 2002. Four out of these five years were war related, while 1994 was a flat market. As history suggests, the markets average nearly 14% gains when the January Effect is triggered. On the flip side of the coin, when the first five days of January are lower, there is no statistical bias of the market, up or down. It is anyone’s game at that point. Not a very reliable indication. – See more at: http://tradingsim.com/blog/january-effect/#sthash.mffUdYLB.dpuf

      Reply
  • Keith,
    Highly appreciate your good efforts.
    Slightly different line of question.
    BNN and various commentators are referencing the health sector stocks a good place in this environment. The logic is compelling, or so it seems, but the seasonality is out of joint (pardon to Shakespeare)
    May one ask, what is your view on healthcare in this period (and longer term) and also please comment on the sector’s seasonality factor.
    Thanks you.

    Reply
    • George–the technical should always trump the seasonals. Trend is decent for the sector–best to stay long if you own the sector until the technical change. Seasonal influences simply imply greater strength during a particular time of the year–not that the sector will necessarily fall.
      Hope that helps

      Reply
  • Some time soon could you look at the Canadian Banks. The sentiment on the banks seem tilted to the negative now, but with a nice dividend would that not be a good time to buy them? Are the banks being unfairly taken down with the oil price in Canada?

    Reply
  • Would you ever consider teaching technical analysis? Thanks.

    Reply
    • Sebastian–I do–we just did a library seminar a week ago for that very purpose. Keep reading this blog to see when we book our next talk.

      Reply

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