Gas Still Leaking On Report
Natural gas
(
NGV1 |
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PowerRating)
is still reeling from last week’s surprise revision by the industry group
American Gas Association’s weekly report that showed a huge build up in
inventories of the fuel. The report was revised from the previous week,
which showed a surprising drop in supplies and spurred a 12% spike, the
largest of the year, in nat gas prices. Last Wednesday’s report
substantially turned around the fundamental picture of nat gas and drove
prices to erase all of the 12% spike and then to new lows. The report also
brought into question data provided by the AGA.
Nat gas is on the
Implosion-5 List and even after trading lower in overnight trading is making
good on an Off The Blocks
short entry and trades below a weekly gap left on the chart from back in
February of 2000.
Unleaded gasoline
(
HUV1 |
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PowerRating) has mixed signals, in that it is
registering on the Momentum-5
and
New 10-Day Highs lists and is also a potential
Turtle Soup Plus One
Sell
reversal situation. Notice that one way to play such
situations is to take the Off The Blocks
long entry on the breakout of its opening range, then to project the
potential distance this market might travel using a Fibonacci extension.
The 127.2% and 161.8% extensions of Friday’s afternoon swings suggested this
market could rally to .7852 or .7894, respectively. The high
on the session so far — and potential place to have covered, covered and
reverse for the TS+1, or to define as intraday risk for the remainder of the
day — came just above the 161.8% extension at the intraday high of .7900.
Beyond utilizing such swing trading strategies, bear
in mind that unleaded gasoline did make new multi-month highs and that the
market is being underpinned by stronger-than-expected late-summer gasoline
demand and the outage of a refinery in the Midwest that is believed will
crimp the supply of reformulated gasoline, the grade deliverable on the
NYMEX.
From the Momentum-5
and
Pullback From
High lists, euro FX futures
(
ECU1 |
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PowerRating) and Swiss francs
(
SFU1 |
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PowerRating)
are pulling back for a third day and should be placed on watch lists for
intraday continuation triggers and/or for a move above today’s high, which
would trigger their Pullback From Highs setups. These contracts are also on
the Multiple Days Low
Volatility List, implying they will make a larger-than-normal move. This is
a somewhat infrequent case where a market is suggesting a big move and
indicating direction (volatility setups do not indicate direction, only an
impending large move).