Gas WarsThis is isn't my usual type of analysis, as I prefer to stay neutral and let the price action speak for itself, but I find the situation on Natural Gas very interesting and wanted to share my view on it. In trying to interpret the forces at play here in the recent past evolution of this market, I take a close look at highs and lows, peaks, bottoms, and the momentum and quality of a wave/move.
I posted an idea regarding wave from A to B which I partially anticipated in "Natural Gas Scenarios" but the end of the wave at B was a little bit of a surprise to me. It is almost like the Bulls were in charge but they went too far. Then the Bears got back into it, made some Bulls cash in and exit and it all came tumbling down. Point C is another similar case of "going too far" resulting in an immediate turnaround with the same type of momentum up until 2.842 which is a relevant level as it has seen several tops and turnarounds.
What is interesting in this situation though, is the represented "eye" shape which highlights the succession of higher lows, lower highs, and the change in the volatility of the market. Basically all forces that have been pushing this up and down, have receded a bit, bringing it into a tight spot where this might want to pop out sooner or later.
My main scenario which I am concerned about is an incursion towards the orange zone, where this could find a support and bounce back and try to reach for the white rectangle zone, a zone which I consider to easily qualify as a "going too far" scenario, where the Bears might come aggressively back into play and try and push this lower and bring it back to its senses.
On the opposite side of this potential is the Green Zone rectangle, where if the price reaches it in the specified time zone, it might trigger the reverse "going to far" scenario and let the Bulls take charge for a bit and chase the bears out of the picture in short term.
No clones were hurt in this experiment and in case the empire strikes back we can always hope for the return of the Jedi in case these Gas Wars continue to keep this market range bound, perfect for swing trading for the brave. May The Force of Profitable Trading be With You!
PS: Yoda is taking a nap. nen was here.
