Natural Gas Stockpiles Growing Above 1 And 5 Year Averages
Eric De Groot | Nov 26, 2015 08:04AM ET
Bearish fundamentals, growing stock piles of natural gas consistently above their one and five-year averages, support the bears. While natural gas (price) is often discussed in terms of supply and demand or 'the fundamentals', a minority of independent thinkers quickly recognizes it's driven by human behavior.
Interactive Chart: UNG
A negative long-term trend oscillator (LTCO) defines a down impulse from 20.83 to 8.86 since the fourth week of July 2014 (chart 1). The bears control the trend until reversed by a bullish crossover. Compression (white circles) generally anticipates this change.
A close above 26.83 jumps the creek and transitions the trend from mark down to cause.
Chart 1
Leverage
A positive long-term leverage oscillator (LTLO) defines an up impulse and bear phase since the third week of June 2014 (chart 2). This supports the decline (see price).
A diffusion index (DI) of 20% defines Q2 accumulation (chart 3). A capitulation index (CAP) of 41% supports this message (chart 4). DI and CAP's trends, broader flows of leverage and sentiment from extreme accumulation (green dotted line) to distribution and extreme fear (green dotted line) to complacency supporting the bulls (red arrows), should not only continue to extreme concentrations but also restrain downside expectations until reversed (see price).
Continuation of the decline within these trends represents a sign of weakness (SOW). This is bearish for natural gas longer-term.
Chart 2
Chart 3
Chart 4
Get The News You Want
Time/Cycle
The 5-year seasonal cycle defines weakness until the end of the year (chart 5). This path of least resistance restrains upside expectations (see price).
Chart 5
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.