ロング

Natural Gas? More Like Natural Go. 4-Handle Coming.

アップデート済

Over the course of 48 trading days between the Dec. 13 high and the Feb. 3 low, natural gas has lost 69 percent of its value.

Let's put that into perspective. Just imagine if, over the next 2 months:

Gold went from $1,874 to $590
WTI crude went from $79.72 to $24.17
Bitcoin futures went from $21,775 to $6,750
The SPX went from 4099.75 to 1,270

That's the kind of thing that just happened to natural gas, and naturally, it makes people wonder if they can get long, but they're also scared to get long.

And it's fair to be scared. NG's MMs are the biggest maniacs in any commodity or equity and a fall from $2.50 to $1.25 isn't "just a dollar" anymore, it's 50%, which kind of matters when you're levered long on 2-3x ETFs or just trying to trade big lot COMEX.

Regardless, I believe the time is right to go long. I don't believe the time is right to go long for $18. But I do believe that the time is right to bag the better part of an impending - and sharp - 50-75% move.

Eyes on China

I have to urge readers that you simply must be cautious with any long position at present, for the Wuhan Pneumonia situation in Mainland China is extremely dangerous.

Whatever you choose to believe when it comes to the Chinese Communist Party, I won't give you a hard time. If you want to believe the establishment narrative that Xi Jinping's hysterical Zero COVID weld-people-in-apartment-buildings social credit scheme actually made the virus not kill anyone to the degree that the Mainland, despite being the world's (formerly) most populous country and ground zero of the epidemic has suffered tens or hundreds of times less deaths and cases than the west, okay, you do you.

But when you see Zero-COVID fall, the Party says there were suddenly tens of thousands of new deaths and millions of new cases, and then since Jan. 10, the John Hopkins University tracker has reported ***0.00*** new cases, every single red alarm bell in your whole body should be ringing.

In our lifetimes, we will see the Chinese Communist Party fall. It will probably take Xi Jinping down with it, but it might not. And ultimately all the crimes against humanity the Party has committed, especially the 23-year persecution of Falun Gong and the unprecedented live organ harvesting of its practitioners (and Uyghur Muslims) will become the only thing in the world that matters.

Markets will actually gap down those days and won't come back. Wall Street won't be risk-on, at all, anymore. And thus, the algos won't be market making anymore.

The Call

Last year, I had two extremely successful calls on Natural Gas:

Published in October: Natural Gas / NG - Act II: A Number That Starts With "2"

Natural Gas / NG - Act II: A Number That Starts With "2"

I don't think anyone believed that at the time.

And in September, I had called when the market had finally turned from bear to bull: Natural Gas / NG - It's Officially a Bear. Now, Hold My Beer

Natural Gas / NG - It's Officially a Bear. Now, Hold My Beer

Now, it's nice to have had some success, but please remember:

1. Broken clocks are still right twice a day
2. Past performance is not indicative of future performance

Now, for where we're currently at, there are some key factors:

Natural gas went down in a straight line for 33 trading sessions (thanks, Freemasons!)
The first trading day of the year was a gap dump
A brief sweep of the $10 psyop figure was _not_ the medium or long-term top.
2020 already had months of 1-handle
NG hasn't taken the December '20 monthly pivot at $2.2 and has started to show signs of reversal
We're getting close to summer, which is going to be HOT again because the planet's climate is trashed (just not from that CO2 propaganda nonsense. Earth is just an old man on life support, for real.)
Natural gas is this thing that produces most of the world's electricity, in a world that's using ever more electricity all the time

And so what I would ultimately like to point out is the ONLY thing you need to know as a trader:

A bounce from Friday's session close back to the gap set on the first trading day of the year amounts to a 75% gain.

Now let's say that the MMs aren't going to squeeze shorts that badly or reward bulls, even temporarily. Either way, the algorithm is for sure going to rebalance this extreme of a drop, and even if it were to rebalance 50%, you're still looking at a 35% gain.

I believe that for certain NG is about to bounce. It's just that either:

a) The bottom isn't yet in
b) The bottom is in after a 90% retrace to the $2.35 bottoms (this should occur when Nasdaq goes ham as Wall Street "Big Shorts" tech to retail and Cathie Woods)

Nasdaq NQ QQQ - Reality Will Be a Tough Pill for Permabears

Nasdaq NQ QQQ - Reality Will Be a Tough Pill for Permabears

$3.6 - $3.8 is the conservative upside target
$4.2 - $5.0 is the maniac upside target

Either way, I don't believe it's going to V-Bottom and run $18 and feed inflationary pressures, since equities need to go up before they go down, and CPI printing big gains will really get in the way of the narrative being woven by Citadel's PR firms.

I think this spike should come fast and strong and the retrace won't be that bad, but will be consolidate-y.

July of 2023 and straight through the middle of 2024, if humanity makes it functionally that long, is going to be very inflationary and very chaotic.

The status quo, the old normalcy, is long gone, and never coming back. Mankind is walking towards both the end, and its future.

Be careful. You choose your path with your heart and your conduct.

ノート

What's important in this call isn't whether or not we've bottomed yet. 1-Handle before bounce is certainly on the table.

The market makers are very annoying people.

It's that there's a high probability situation unfolding in a commodity that very rarely trades like this. It didn't even trade this one-directionally at $9 and $10. In a commodity where there's no fundamental reason to be bearish on its price action.

And so for you, as a trader, it's up to you to figure out how to take advantage of the situation, and since timing the markets is the hardest thing and finding the exact bottom is hard, that may mean bagholding.

And there's the risk that bagholding could lead to 0-handle Natty before it bounces back to $1.25.

Changing your life is a very difficult thing to do. So you shouldn't go gambling. Just do solid things and take a long-term approach.

ノート

This is a pretty stupid trading pattern:

But the important thing to note is Natty finally stopped dropping.

Also, Monday is a Canada/US stock market holiday, notable for ETF manipulation.

ノート

If you're annoyed or frightened by natural gas swinging 10% up and down and thus causing the bear/bull ETFs to swing around by 20% in a day, you really should just trade oil, or the Dow, instead.

Natural gas is the most annoying market maker in any asset class.

ノート

Still no 1-handle.

Also, the Canadian 2x Bear ETF, HNU.TO, which looks like this:

Gets a 15:1 reverse split when market opens Tuesday. Notable because Canada is a fossil fuel country.

it's fun that a 2 cent move is 1% now, isn't it?

ノート

You see, my friends, now that Natty only goes down, everyone knows that, suddenly, supply and production directly correlate to price.

How can it go up when those gall durn oil and gas companies keep on making it?!

Don't you *understand* supply, and demand?!

Let's see if the no-1-handle thesis was sound.

ノート

The upside of Natty going to $0 is that we go from a 75% bagger back to $4 to an infinity% bagger back to $1.

Think about it.

ノート

So, all dramatics aside. Natty is actually now giving indications the reversal is coming.

A sweep under the psyop level of $2 and a 10+% bounce that took out a high is the kind of pattern you're looking for.

ノート

That was a 17% bounce off the lows in 7 hours.

ノート

This price action checks every single box in the reversal pattern checklist:

It's just that we may not have a bottom yet. It's very difficult to prophesize. More or less all you can do is watch price action and make an estimated guess.

ノート

27% off the bottom including a market open Natural Gap.

People were telling me on Twitter today that $1.5 was coming, This is even dumber than when people wanted to keep shorting Tesla when it was at $100.

ノート

Isn't it nice when BOIL and KOLD move 4% when futures moves 8% because the MMs have decided today they'll be a 0.5x ETF instead of a 2x ETF?

Market manipulation is as dull as communism.

ノート

Somehow, people are still bearish on Natty.

On the other hand, there's still 12 puts on TSLA expiring March 31 at $50 (lol), now trading for $0.00.

Thus, why Buffet said to be greedy when others are fearful and fearful when others are greedy.

ノート

One of the big tells on Natty as to what it's doing is that it's taking out highs and also not going down.

$3 is a big figure and $4 is what I really want to see, but it's really hard to tell what happens in the middle.

ノート

People always talk about "Buy the F'in dip, noob." It's easy to say, hard to do.

But you've got a 76% retrace, and a sweep of $3 shouldn't be the top.

30% drawdown on the ETFs sucks for hodlers, but what can you do?

ノート

Natty looks set to reverse.

The danger is above the $3 high, if it goes and takes that in a very short amount of time, then it's the same kind of pattern just seen on Bed Bath and Beyond and Vimco Ventures and will likely lead to new lows until later in the year.

Well, first it has to raid $3.

ノート

I suspect the bottom for now is in on Natty.

I suspect it'll take $3, but it's unclear now if it'll go as far as $4 because I suspect this is some manipulation pump and summer will have cheap oil/NG because the regime needs to keep the inflation narrative down until the winter.

ノート

Natty looks set to rip along with oil.

I imagine the first target is that gap under $3. It certainly seems $2 is being algorithmically macroed.

The faster the pump is the more bearish the next 6 months of price action will be, in my opinion.