Monday was a record volume day for the triple ETN UGAZ.
These record volume days on the triple ETN’s/ETF’s often mark cycle turning points.
Natgas printed its lowest point on day 34 — which placed it in its timing band for a daily cycle low. The rally out of the day 34 low was stopped at the triple resistance from the converging 10 day MA, 50 day MA and the 200 day MA. That sent Natgas lower on Monday to undercut the day 34 low. Monday was day 40 – which is very deep in the timing band for a daily cycle low. There are bullish divergences that are beginning to develop on the oscillators which often precede the cycle low. And Natgas also printed a bullish reversal on Monday, which eases the parameters for forming a swing low. A break above 2.23 would form a swing low to signal the new daily cycle.
In the Mid-Week Update I plan to discuss where Natgas is in its longer term, intermediate cycle.
The commodities appear to be emerging from their multi year cycle lows.
The Miners printed their multi-year low in September, 2018. Oil did so in December, 2018 and the Industrial Metals (GYX) printed theirs in January, 2019.
June is month 39 for the multi year Natgas cycle, which does place Natgas in its timing band for a multi year low. And there is a bullish monthly reversal forming.
The triple leverage fund UGAZ had record volume signaling a capitulation low.
And Natgas formed a daily swing low that was very deep in its timing band for a daily cycle low. A close above the 10 day MA will signal a new daily cycle and will likely mark the multi year Natgas Low.
Natgas printed a bullish reversal on Tuesday.
Tuesday was day 17 for the daily cycle which places Natgas in the early part of its timing band for a daily cycle low. The previous daily cycle ran long. And since cycles often balance a longer cycle with a shorter cycle, that increases the odds that Tuesday marked the daily cycle low. Natgas still needs to form a swing low and break above the declining trend line to confirm a new daily cycle. A break above 2.92 forms a daily swing low. In Wednesday’s Mid-Week Update I plan to discuss weekly Natgas cycle and how once a daily cycle low forms that it could also form an intermediate cycle low.
Now lat’s take a look at the volume on the triple leverage fund – UGAZ.
The volume on UGAZ has surged to an all time high. And you can see that previous surges in volume has often coincided with a bottom.