Well, the pain cave continues as I’m keeping my position and searching for a “low” in UNG. I’ve updated the count because recent price action has gone below the low made in 2021 (UNG) but, as you can see, the futures has not broken below the low. UNG and the futures “try” to go in concert but, as you can tell, they aren’t a “perfect” one for one match.
Man, to think I was holding this puppy up at 34 and ‘expecting’ a pullback … a complete wipeout, and now a losing position to boot? This is an example of horrible investing. Period. But, I’m sticking with it as I do see a low approaching or here.
I LIKE the MONTHLY MEASURED MOVE PATTERN THAT IS SHOWN BELOW. ITS A PERFECT MATCH IN PRICE AND TIME. But, that doesn’t mean it won’t fail, of course, but these MONTHLY MEASURED MOVES don’t usually fail. In fact, I’ve really never seen it happen. No kidding.
The UNG chart shows another (my counting is like my golf game, remember?) valid count and we are completely a “b” wave that broke the low but it “should” be bottoming here or nowish … there’s a subwave count I’m watching which I will update depending on what happens over the coming days/weeks. But, either way, the next major move “should” be UP for UNG.
We are tickling the 1.05946AB=CD and the 1.732 extension from ‘a’ (purple) … basically an ABCD into a 1.618/1.732 extension SHOULD provide support for the next move up .. BUT, it doesn’t have to.
Measured Moves are the most underutilized YET most POWERFUL tool in our toolbox. I think people don’t use them because they clutter their charts w/ lagging, coincident indicators … moving averages, bollinger bands, oscillators, and 1000’s of other tools. Do they work? SURE .. but, just think about it, ALL of the techniques and tools we use as chartists (even the esoteric stuff) is all contained in what? THE MEASURED MOVE.
This measured move is so nice BECAUSE it’s EXACT in both PRICE and TIME.
Add that to the count shown and the PATTERN present we have a very high probability trade. Right now, we are only risking a dollar. Trust me, we have time get into this move but the longer you wait, the more your risk will increase.
This analysis is wrong and would stop out with a WEEKLY close below 7.00.
Other “proxies” are showing amazing measured move synergy … in this case, from a percentage perspective using log scale.
Here is the “final” count I’m going w/ in regard to UNG.
Let’s add this up …
Futures contract measured move – exact from a MONTHLY SCALE
UNG and BOIL percentage measured moves – exact
The 1.68179 extension hit after 233 calendar days … a Fibonacci harmonic
ABCD hit as the same TIME the extension pattern hit
The “count” on the way up violates no rules …
Note, because the all time low clearly went thru the prior low we CANNOT label this as wave 2. The form/structure sure looks like a “B” wave …
Net-Net … this has all the markings of a VERY powerful beginning of a 2+ year move and right now the risk reward is 35:1.
It’s been a while since I blogged about Natural Gas. And, what a ride it has been …because those of you who have been following me for a while, know that I got into UNG around 9 bucks almost two years ago and -GUESS WHAT – I’m still holding it! Yes, probably the dumbest thing I ever done because I was up a NICE 5 figures and counted and watched precipitously as it just took it all back.
Because when I bought the darn thing I “felt” or “knew” that this was going to be a MAJOR low in Natural Gas and I wanted to put REAL money at risk and basically ride a multi-year wave like I do surfing.
The thrill of the great waves – this run had it!
The beat down inside w/ the ice water fist to the face – yup!
No waves at all – sure.
So, guess what, I’m riding the waves of UNG for years …
In the next post on Natural Gas I’ll go into the count and the PATTERN that was present and all that. But, for now, just check this one out. I JUST saw this last night. No kidding, going to enjoy a little sun this AM before another deluge in San Diego and GET THIS – just an hour away from me (Julian) they are forecasting 10″ of SNOW. Going to be a wild weekend … a perfect time to do some charting and, ugh, taxes.
THE POWER OF THE MEASURED MOVE … not only is this MEASURED MOVE equal in PRICE it is EXACTLY EQUAL IN TIME.
Get LONG and look to leverage/ architect a position to expire in 2027 w/ a price target of 15-16 or…not.
I know this analysis might throw some of you … but, I truly LIVE by the Measured move and the potential here is somewhat analogous to this:
I’ve had a couple people text me over the past couple days regarding Natural Gas and UNG.
well, right now UNG is definitely a dog and I went a little red today but I’m going to stay w/ this one because 1/ this is a LONG TERM play and 2/ I’ve been watching a SUPERB BUY pattern on the Natural Gas futures as shown below.
certainly looks like it wants to go down and tag that level … I’ll hold LONG UNG until that level is tagged. it DOES NOT need to go down there but it’s a valid pattern BUY ….until that level is taken out to the downside on a daily/weekly close I’ll remain my bullish outlook on Natural Gas.
will I add to my position w/in UNG if it goes down and tags that level … NOPE. as a pattern recognition investor/trader I have been taught to never add to a losing position. so, I’ll WAIT for it to become positive before ever thinking of adding anything and if it blows thru the BUY PATTERN to the downside then I’ll take a loss. that loss NEVER exceeds 3% of the total trading capital.
update: rolling into a BUY zone for both futures and UNG. IF the thesis that a BIG low is in place THEN we should find support and then continue upward.
take time to look at the long term Nat Gas Continuous Contract chart … you can see the “major” trend line which is acting like resistance .. a weekly open and close above that trendline could signal game on for the bulls.
if major support breaks then we could be looking at the 7 dollar level on UNG. needs to find support in the area shown …
if you search for Natural Gas on the blog, you’ll see for almost 3 years – yes 3 years, I’ve been flirting w/ a low (big low) on Nat Gas and looking for the pop … back in 2017 we ID’d a pop but it quickly got run over. Wrong …and, since then, I’ve really just dropped it off my radar.
two of my really good virtual (unfortunately) friends from the Academy, Rugby, flying and blah blah and me trade texts back and forth. they act all smart like they are finance guys about the news and the P&E (did I spell that right) and fundamentals .. I just look at PATTERNS.
they asked about Nat Gas. “Great,” I thought “I can go back and visit my old nemesis. and, I would be an idiot to forget what now President Biden said about energy, right? One would think it would be falling out of the sky. EXACT opposite.
I believe it made a VERY big low in July, it just finished a 5 wave move up from an “ending diagonal” and we have 5 ratio’s (retracements, extensions, measured moves, projections) all coming in at 2.2.
I do want you take note of the yellow area at the left of the screen .. on a daily, this area looks like an expanded flat. however, when you drill down to a lower time frame (here a 4 hour) it sure looks like I’m curve fitting – which I might be, just being honest. I’m putting a bias into the fact that I’m right on the thesis: BIG LOW. that changes things somewhat because wave 4 CANNOT go below the end of wave 1 (or above if going down). sometimes you can dirty your purist mindset and maybe go w/ a CLOSE below 1 and if there is a daily wick or two right around the end of 1 you can curve fit and the count continues. folks, in this case 4 was below for almost 10 days … that’s a broken rule and an invalid count. see how fun Elliott Wave can be …?
one last, if you look at where the “PATTERN BUY” level is at that 2.1-2.2 zone one will see that the PATTERN completely closes the gap left on the 4 hour chart … nice.
If you look at UNG, it hasn’t budged so if your going to play the ETF/Fund side of the house, I would recommend that you wait to BUY until Nat Gas hits 2.2 on the continuous futures contract.