Natural Gas / NG - Act II: A Number That Starts With "2"My previous call on natural gas made Sept. 19 has come to fruition, achieving all three targets, and in a shorter than expected period of time:
Natural Gas / NG - It's Officially a Bear. Now, Hold My Beer
The question I've asked myself for the last few days is simply: Now that the June lows have been taken out, is it time for a reversal?
And frankly, I don't believe a (sustained) reversal is imminent, mostly because I really do believe $18 NG1 is incoming and these market makers, who are total maniacs, will not make it so easy for one to go long.
Things to keep in mind when we're so close to the end of the month and major lows have been achieved:
1. Look out for bounces as monthly candle wicks are painted
2. Look out for monthly candle highs to be painted in the first days/weeks of November
3. Big volume gaps between $6.3 and $5. "It's only 23%!"
4. Big bounce from $4.9 to $5.3 June lows are likely
Trendlines are astrology, for real. Stop believing in them. No banks and no trading floors at Shell, Exxon, Aramco, Gazprom, are sitting there thinking of what to do with billions of dollars of inventory and drawing a diagonal line between two lows and thinking to themselves about such and such "support." That is truly absurd.
Yet, you should pay attention to these things because, to the contrary, they're used to fleece dumb money. The markets revolve around fleecing dumb money, and there are entire funds with billions of dollars of dumb money.
To put this trendline into perspective, although it looks reasonable on the 4H, look how absurd this is on the monthly:
That being said, it's also reasonable on the 1W and 1D charts:
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We are notably at that point, below the psychological $5 level and more or less at the trendline, and at the end of the month. When June made its Armageddon move downwards it came right as the monthly contract closed, so I personally do not expect a repeat of the same situation.
I think a bounce to $5.3 is more or less inevitable, and I suspect rather than break through it and act like Silver/Gold/WTI has retracing to newer highs, it will bounce off the low and manufacture the kind of "resistance" found in technical analysis books to encourage late shorts.
Early November may actually show us a more bullish impulse back to $6, but keep in mind that to get back to that mid-October weekly gap would more or less fill the entire October monthly bar with a November wick, so that gap is likely a breakaway gap that will stay in place for some time.
Anyways, what I expect to see is after some retrace to catch late shorts and squeeze and break them, as well as to exploit early bulls, we will see a retrace, one that won't last long and will probably be quickly accompanied by another breakaway gap.
I believe that natural gas will, in a very quick period of time, actually print a number as low as $2.9, a move that will be accompanied by WTI also setting new lows and approaching $50, as I noted in a recent call:
WTI Crude Oil / CL1 - Accumulation Before Global Conflict
Europe has already filled their coffers with $9-10 US LNG delivered via boat and until they need to refill the barrels in a few months after Freeport is re-opened, prices should be suppressed as producers and funds get net long on energy.
The reason is, problems between NATO and Russia and problems between the World and the Chinese Communist Party under the new found "Emperor" Xi and his delusional miscalculation to stay attached to Marxist-Leninism and communism will lead the Party to either attack Russia alongside NATO or to pinch both Russia and NATO with an assault on Taiwan.
Energy will be _extremely_ expensive everywhere once the global conflict breaks out. But as with all such moves, first come lows that are more uncomfortable than early bulls and scared bears are comfortable with.
2023 will not be a pleasant year, so make sure you do your utmost to have a proper Christmas with your family and act like a good person.
Whoever you are who is reading this, what I want to tell you is this: If you want a future, you need to start by first rejecting communist culture, especially all things Marxist-Leninism.
Next, you need to reject the Chinese Communist Party, for it is guilty of the crime of live organ harvesting genocide against Falun Gong and will be purged by history.
Third, you need to start to emphasize virtue and improve your conduct and morality on a foundation of traditional human culture.
I am not talking about dogma, and I am not talking about religion. Both of those are totally useless. I am talking about a rational understanding of what it means to be "a human being," the things that have allowed this civilization and this cycle of history to persist over the last 5,000 years, founded on the back of the Chinese dynasties.
There are so many lessons in history. I hope that whoever has the fortune to encounter my words can walk out of the catastrophe. But if your thoughts are unrighteous, then if you can't, you can't.
Regrets, however, will be no help at all.
It's just like poker: you have to figure it out and have your bets placed before the cards are turned face up. Once the truth is revealed, everything is fixed.
