Natural Gas Low

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NATGAS confirmed a new daily cycle on Monday.

natgas

The NATGAS daily cycle peaked just below the 50 day MA last Monday, which was day 13. A swing high then formed sending NATGAS into its daily cycle decline. NATGAS printed its lowest point on Friday. At 17days that places NATGAS in its timing band to print a daily cycle low. NATGAS formed a swing low on Monday that closed above the 50 day MA. NATGAS also closed above the upper daily cycle band which signals that the February low hosted the intermediate cycle low and that Monday was day 1 for the 2nd daily cycle.

I routinely cover both the daily and intermediate cycles for Natural Gas in the Mid-Week Update and in the Weekend Update.

Possible Miner Low

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The Miners plunged over 16% last week. And they started off Monday with more selling. But that soon reversed.

gdx daily

Monday was day 24 for the daily Miner cycle. 24 days places the Miners right in their timing band to print a daily cycle low. Monday’s bullish reversal eased the parameters for forming a daily cycle low. A break above 21.76 will form a swing low to signal a new daily cycle.

NATGAS also appears to have formed a minor low.

0 natgas

NATGAS printed is lowest point on Wednesday, day 27, which placed NATGAS is in its timing band for a DCL. NATGAS closed above the day 27 low on Monday to form a daily swing low. NATGAS also closed above the 10 day MA to signal a new daily cycle.

The 10/13/16 Morning Report

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Stocks appear to be rolling over into an intermediate cycle decline.
Gold and the Miners are resisting the bullish dollar advance and appear to have bottomed.
So this morning I want to take a look at NATGAS.

1 NGS weekly

While NATGAS continues to close above the upper weekly cycle band signaling that NATGAS is continuing in its weekly uptrend we can see that NATGAS is running into resistance at the 200 week MA.

2 ntgs 200

The 200 week MA is has demonstrated to be a major support/resistance area where rarely does price break through on the first try. As NATGAS emerged from the last 3 year cycle low the 200 week MA managed to cause a decline into an intermediate cycle low.

3 ntgas daily

NATGAS formed a daily swing high on Wednesday. NATGAS maybe consolidating to allow the 10 day MA to catch up to price. But what is developing on the weekly chart suggest a left translated cycle formation is a possibility. A close below the upper daily cycle band will signal a left translated daily cycle formation that could lead into an intermediate cycle decline.

Looking for a NATGAS Daily Cycle Low

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NATGAS closed below the upper daily cycle band on Thursday to begin its daily cycle decline.

natgas daily

NATGAS printed its lowest point on Monday, day 18, following its day 10 peak . That places NATGAS in its timing band for a daily cycle low. The bullish reversal that formed on Monday eases the parameters for forming a daily swing low. A break above 2.94 forms a swing low and then an accompanying declining trend line break will confirm a new daily cycle.

NATGAS is in a daily uptrend. If a daily cycle low forms above the lower daily cycle band then it will maintain its daily uptrend. NATGAS will remain in a daily uptrend unless it closes below the lower daily cycle band.

Energy Update

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NATGAS appears to have left behind a daily cycle low.

natgas

NATGAS printed its lowest point on Wednesday following the day 10 peak. Wednesday was day 17 for its daily cycle, which places NATGAS on the early end of its timing band for a daily cycle low. NATGAS formed a swing low, gaining a big 4.86% on the day. A break of the declining trend line will signal a new daily cycle.

You will notice that NATGAS closed above the upper daily cycle band as it rallied into its day 10 peak. During the decline, NATGAS managed to hold above the lower daily cycle band. Now a close back above the upper daily cycle band signals that NATGAS has re-established its daily uptrend.

Oil also had some bullish developments on Thursday.

oil

Since 21 days is too early to expect a daily cycle low to form, I expected oil to be rejected by either the 10 day MA or the declining trend line and then complete its daily cycle decline. Setting aside the early 21 day cycle count, oil is behaving as if it is rallying out of a daily cycle low.

The daily oil cycle peaked on day 12 and then printed its lowest point last week on day 21. Oil has since formed a daily swing low and regained the 50 day MA. Then, not only did oil regain the 10 day MA on Thursday, it also broke above the declining trend line and managed to close above the upper daily cycle band. The close back above the upper daily cycle band indicates that this is a new daily cycle.

oil fib

I still have some concerns that day 21 is too early for the daily cycle low. However, looking at the fib retracement we can see that oil retraced a full 61.8% on this recent decline. So unless oil does something to make me think differently, like closing back below the upper daily cycle band, I will label day 21 as an early daily cycle low.

Bullish Energy

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The energy sector continues to develop bullishly.

oil

Tuesday was day 9 for the daily oil cycle. Oil broke above the declining trend line which delivers final confirmation of the new daily cycle. Oil also closed above the upper daily cycle band. This signals an end to the daily downtrend and confirms that oil has begun a new intermediate cycle.

NATGAS appears to be bottoming as well.

natgas

NATGAS printed its lowest point on Friday, following the day 6 peak. NATGAS formed a swing low on Monday and then closed above the lower daily cycle band on Tuesday to indicate a new daily cycle. While Friday was only day 16, which is a bit early for a DCL, it does follow an extended 43 day daily cycle. So a 16 day cycle would help to even out the cycle counts. Now a break of the declining trend line will deliver confirmation of the new daily cycle .

Confirmed Uptrend

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NATGAS broke above the declining trend line last week to signal the new daily cycle. And by closing above the upper daily cycle band last week NATGAS appeared to be establishing a daily uptrend. Today NATGAS confirmed the new daily uptrend.

1 natgas

Tuesday was day 7 for the daily NATGAS cycle. By closing above the upper daily cycle band in such a clear and convincing manner, NATGAS has confirm that it is in a new daily uptrend. NATGAS will remain in the daily uptrend until it closes below the lower daily cycle band.

2 natgas

NATGAS prints a multi-year low about every 30 – 35 months. NATGAS printed its lowest point in March after declining for over 25 months. March was month 47, placing NATGAS deep in its timing band to print a 3 year cycle low. While we still need to see a break of the declining monthly trend line to confirm that NATGAS is in a new 3 year cycle, the way that NATGAS sliced through the 200 day MA adds to my conviction that it is leaving behind its 3 year cycle low.

Stocks are also in a confirmed uptrend.

3 spx

Tuesday was day 6 for the daily equity cycle and stocks printed another higher high. While stocks did close lower on Tuesday than last Friday, stocks still closed above the upper daily cycle band which indicates that stocks are in a daily uptrend. Stocks will remain in the daily uptrend until they close below the lower daily cycle band.

Play it again, Sam …

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The Industrial Metals were caught in a bear market decline

gyx jan

January was month 12, placing Industrial Miners in their timing band for a yearly cycle low and there was a bullish divergence developing on the weekly True Strength Indicator.

gyx jan rally

Once the new daily cycle began, the Industrial Miners rallied for over 15%.

gld nov

Gold was also caught in a bear market decline.
November was month 13, placing gold in its timing band for a yearly cycle low and there was a bullish divergence developing on the weekly True Strength Indicator.

gld nov rally

Once the new daily cycle began, the gold rallied for over 22%.

oil feb

Oil was also caught in a devastating bear market decline.
February was month 11, placing oil in its timing band for a yearly cycle low and there was a bullish divergence developing on the weekly True Strength Indicator.

oil feb rally

Since the new daily cycle began, the oil rallied for over 43%.

gdx january

The Miners, were also caught in a devastating bear market decline.
December was month 14, placing the Miners deep in their timing band for a yearly cycle low and there was a bullish divergence developing on the weekly True Strength Indicator.

gdx january rally

Since the daily cycle began, the Miners have rallied for over 67%.

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And there is a similar set up with NATGAS.
NATGAS has been caught in a devastating bear market decline.
March is month 17, placing the NATGAS deep in their timing band for a yearly cycle low and there is a bullish divergence developing on the weekly True Strength Indicator.

ung daily

The daily cycle show us that NATGAS is deep in its timing band for a daily cycle low. So today’s swing low has good odds to mark the daily cycle low. A break of the declining trend line confirms the new daily cycle.

All I can say is

Play it again, Sam …

NATGAS Heating Up

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NATGAS confirmed a new daily cycle today.

natgas

The NATGAS daily cycle recently peaked on day 13, formed a swing high and declined into its daily cycle low. NATGAS printed a higher low on day 21, forming a right translated daily cycle.

NATGAS consolidated the daily cycle decline for 4 days. Today NATGAS broke higher, forming a clear and convincing swing low and closing above the lower daily cycle band to confirm Thursday as day 5 of the new daily cycle. Our cyclical expectation is to see NATGAS go on to print a higher daily cycle high.

Oil also confirmed a new daily cycle today.

oil

Oil printed its lowest point on 1/20, which was day 24. That placed oil a bit short of its normal timing band for a daily cycle low. Oil did formed a swing low and delivered a declining trend line break. Today we saw oil close above the lower daily cycle band to confirm that day 24 hosted the daily cycle low, making today day 6 of a new daily cycle.

I am not surprised to see these to commodity sectors rally on the bearish break of the dollar.

1 $$$

As we discussed this morning, the dollar’s daily cycle peaked on day 7. A swing high formed on Wednesday, day 11 that also breached the daily cycle trend line. Today the dollar delivered more bearish follow through by closing below the daily cycle trend line. Thursday was day 12 for the dollar’s daily cycle. The dollar has begun its daily cycle decline. Since the dollar is 6 days shy of its timing band for a daily cycle low, we can expect the dollar to trend lower for the next 1 – 2 weeks before printing its daily cycle low.

Something to keep in mind is the jobs number is due out next Friday. So we just may see the dollars ‘s daily cycle decline stretch into next Friday.

Energy

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Oil and the energy ETF XLE both formed swing lows today.

oil

xle

Both oil and energy printed their lowest point on Thursday after an extended decline. Thursday was day 24 for oil and day 19 for XLE. This places oil one day shy of its timing band for a daily cycle low, while it places XLE in its timing band for a daily cycle low.

Both formed a swing low today to signal a new daily cycle. Now a break of the daily cycle trend lines will confirm a new daily cycle for both.

NATGAS also formed a swing low on Thursday.

natgas

NATGAS printed its lowest point on Tuesday, following its day 13 peak. Tuesday was day 19, which places NATGAS in its timing band to print a daily cycle low. The swing low today broke above the declining trend line to confirm a new daily cycle. This just-completed daily cycle printed a higher high and a higher low over the previous daily cycle, thus breaking the pattern of lower highs and lower lows. The status NATGAS’ weekly and yearly cycle is turning bullish and will be covered in the Weekend Report.