It's a gas! Natural gas trend reversal not just blowing bubbles

Okay folks - I've been tweeting for a week about what looked to me like a trend reversal in natural gas. I'm glad to see that Tony Caldaro has marked it similarly in his Objective Elliott Wave work! I've taken the liberty of showing his daily and weekly charts of $NATGAS (spot), below, just above my monthly chart of it (mine's the blue-colored chart at the bottom). Tony's charts also show his note that it's "uptrending" and that means - hello, it's reversed trend from having been downtrending! Of course traders and investors including KI$$ swing traders should use stops to protect against potential losses; but the reversal pattern indicates it's time to switch from selling rallies to buying dips. First, here's Tony's daily chart:

Technical indicators like Stochastics-Relative Strength Indicator (StochRSI) and MACD are part of the confirmation, supporting the Elliott Wave counting. I can't speak for Tony's projections, but I see a potential for $NATGAS (spot) to head for the monthly Bollinger Band midline which may converge with retesting a broken trendline on my monthly chart at approximately $3.80 (double its recent low), then pull back to perhaps $2.85 (which would be a 50% retrace) before pushing up toward testing $6 to $7 eventually. By the way, when I tweet about natural gas prices short-term, I refer to the /NG futures because that what I'm seeing on my trading charts, so allow for the difference between futures and spot pricing. (An ETF like UNG or BOIL will generally track but not necessarily exactly so be aware of that too.)

You can find Tony Caldaro's charts link at the bottom of each of his updates to view these along with all of his public charts. You can find his daily market updates via his tweets as @OEWtony on Twitter, or going to his OEW website http://caldaro.wordpress.com/, or right here in the OEW feed at lower right side of the full site page.

Here's his weekly chart:

And here's my monthly chart of $NATGAS. The markings are outdated but I think the broken shallow uptrending line may serve anew as a place for price to retest probably when it also tests the monthly Bollinger Band midline.

Tour of analytical talent gives more tells for traders on markets' futures

Traders want an edge and we strive to provide that, in our own work and in sharing the best and brightest. While we do feature posts of the consistently best analysis each week, this 3-day holiday weekend allows me to kick back and share a "tour of talent" from other fine analysts looking to January and the new year.

I'm going to post the links here by adding to this list through the day today. So as you browse and check 'em out, also check back later to see what else I'm adding as the day rolls on:

We'll start with Alex Roslin who posts a weekly update at his "COTs Timer" blog I feature in the list at right (non-mobile version of this website), on his assessments from the Commitments of Traders. He has a good way of analyzing the signals from this way of peeling into the hands held by traders (big and small) held around the big "tables" in the financial markets. His update last Friday is noteworthy: "COTs Timer: S&P 500 and Copper Bearish - And a Great Big Ho Ho Ho!" - December 23, 2011 update at: http://www.cotstimer.blogspot.com/2011/12/s-500-and-copper-bearish-and-great-big.html.

We always enjoy Phil Davis who runs the "Phil's Stock World" website and also posts often at Seeking Alpha. If you are comfortable trading options, you probably should be one of his followers or members, if you can keep up. I don't agree with all his views especially outside straight market analysis. But do read his article, "Can we survive without QE3" 12/14/11 at SeekingAlpha, http://seekingalpha.com/#article/313807-wednesday-weakness-can-we-survive-without-qe3/.

The McClellan folks are taking a look at something we've covered before (see my posts on the "sunspots cycles" under the "Cycles - Other" topic here (also in the non-mobile version of this site). See their newest "Weekly Chart in Focus: Are Traders Really Just Driven By the Sun?" - McClellan Financial; December 23, 2011, at http://www.mcoscillator.com/learning_center/weekly_chart/.

Investor sentiment: The bulls aren’t buying it « Investment Postcards from Cape Town, 12/16/11, at http://www.investmentpostcards.com/2011/12/13/investor-sentiment-the-bulls-aren%e2%80%99t-buying-it/.

Marc Faber: Money printing dicates market movements « Investment Postcards from Cape Town, 12/18/11, at http://www.investmentpostcards.com/2011/12/18/marc-faber-money-printing-dicates-market-movements/.

Long-Bond Yield: How Low Can It Go? | Carl Swenlin | FINANCIAL SENSE, December 16, 2011, at http://m.financialsense.com/contributors/carl-swenlin/2011/12/16/long-bond-yield-how-low-can-it-go.

I didn't stumble across this until now - just over a year after its December 10, 2010 publication date. But as a big-picture analysis, it's remarkably intriguing and very much still in potential play. Check it out, "After the Santa Rally: A Technical Analysis" - at Planet Yelnick, http://yelnick.typepad.com/yelnick/2010/12/after-the-santa-rally-a-technical-analysis.html.

Natural gas could "boil" from the low; KI$$ look for reversal confirmation

Natural gas is bubbling somewhat from another low, which could actually be the trough we've waited for a long time. The $NATGAS futures chart hit $3.49 which was a Fibonacci .707 retrace to the prior deep low, meaning a wave 2 type of low can now reverse to a wave 3 type strong rally upward. Below are $UNG daily, $NATGAS monthly, and a point & figure chart (including reversal marker to help confirm bullish reversal).

KI$$ swing and position traders need to see rising volumes with higher highs, and low volumes on higher lows. Until then, stops are just under the recent lows. Technicals haven't been super yet but the deceleration in downtrend has become apparent, and positive divergence has just occurred at the recent lows. That's good. If it's a wave 3 (or C) up, then technicals should start looking very good soon. $NATGAS should also break upward above the downtrend lines that've been on my monthly chart a long time.

Just so you know, this end-October could be a changing time for the markets; in addition to the usual thoughts about winter pricing firming for natural gas. I learned recently there's a new ultra (double) ETF for natural gas called "BOIL". Hmmmm....!

Natural gas looks more bullish on this rise ($UNG, $NatGas)

Natural gas has been a stinky position investment for a very long time now, although great for swing traders buying and/or selling on the sharp waves ($NatGas or the ETF, $UNG). But positive divergence on UNG's daily chart and a price pattern that's a possible bullish reversal make it worthwhile for swing longs and maybe KI$$ positions. So "hold your nose" and take a look!

The daily chart for UNG below shows a nice price spike up after what might be a diagonal down which we'd hope to be finalizing the cyclic low, along with positive divergence in the StochRSI indicator. The monthly chart of $NatGas shows it's been coiling in a range for many months. So if it ends up tanking down again with UNG failing under $9.70 then let's cut and run (stop out) then reevaluate. But so long as UNG stays over $9.70 and tests $10.50, where there's much resistance, it finally has a good chance to retest around $11 again.

That would test the 200-day moving average, so taking partial profits there would be a good idea, then consider scaling in more on a pullback before looking for higher levels on what natural gas bulls hope should be a bullish wave path upward.

Bottom pickers should sniff natural gas again for these breakout (or breakdown) targets

An old trader once said that "picking bottoms is a stinky business". Peeeuw isn't it true, LOL!!! "But" it can be very rewarding :)) Seriously folks, many traders spent months last year looking for a tradable bottom in natural gas ($NATGAS or an ETF like $UNG). We helped spot that it would take longer and lower, and also helped identify "the low". Since then, it's traded not only in its usually choppy daily fashion, "but" also in spikey weekly moves - with higher highs and higher lows. Did last week's carnage in commodities reveal a new opportunity in natural gas? You betcha! Let's look at the charts, below.

I've included my daily charts for $NATGAS and for $UNG (natural gas ETF) below. Those are followed by Tony Caldaro's weekly chart of $NATGAS from his public charts accessible at his the ELLIOTT WAVE Lives On website (always in the sites list, plus site feed, at right side of the page here - thanks again Tony!); plus my monthly chart of $NATGAS with my trendline markings and big-picture Fibonacci levels. The daily charts show that both $NATGAS and $UNG dropped neatly to moving average support. Tony's weekly chart indicates that $NATGAS should be making a swing low that's preparatory to another significant wave upward. And my monthly $NATGAS shows that price has been coiling up within trendlines in a rather triangular fashion. What happens after price retests a triangular pivot, as price is doing right now? It typically moves away from that pivot strongly. When it's ready to also leave the confines of the trading range defined by that coiling up or triangle, then price is also ready to thrust toward a new high (or low).

What'll it be for natural gas? The point-and-figure (P&F) chart at the bottom projects a bearish target of $1.50. Ouch! That actually would be a "triangle target" meaning the measured move if a thrust downward from the triangular shape it's been tracing. So if it breaks below $2.74 that would be a warning .... And below $2.48, it would be virtually certain to drop to $1.50/1.60. But the P&F isn't absolute.

On the bullish side, the technicals are supportive, and natural gas has been honoring a very long-term trendline that would keep it pulsing higher. Breaking to the upside would suggest a measured move close to $7.07 which happens to be one Fibonacci target based on a 1.318 extension of the drop within the triangular range. A 1.618 extension would point to $7.68, although it's more likely we'd see a pullback after the $7.07 area. Fibonacci retracements back to "the peak" on the monthly are $6.83 as the .382 retracement, and $8.13 as the 50% retracement. These reinforce the bullish projection to the $7 area first, probably followed by a retest of support in the $5 range before going higher to the low $8's. Moving higher would also get the 50-day moving average above the 200-day moving average, which is a bullish "golden cross" that $NATGAS is already working on and $UNG (which does move differently but generally similarly) is coiling up to accomplish. Of course KI$$ investor/traders should use stops too, and exit longs if this pivot/support area is broken to the downside. But the situation looks ripe for the long side again. All in all, it's looking like time to play natural gas from the long side again, with near-term support right nearby at the moving averages already being tested on the daily chart. Assuming it holds this support, then bubbling up should attract more buying to break out quite bullishly.

Oil, gas and gold in reversals - nobody rides for free in these markets

Not only are equities poised for some reversal patterns into consolidation or correction. It's looking like that for oil, gas and gold too. Below are snapshots of those three charts. We'll be looking for some telling moves this week and month to gauge just how significant and long-lasting the effects will be. January will be an interesting month in a very interesting year!

Crude oil tests key Fibonacci level so brace for likely reaction

Right in this Bradley turn date window, crude oil has tested up to the $91.52 level in WTIC that represents the Fibonacci 50% retracement to the prior all-time peak which I've been describing. Now that it's made this level, traders need to be alert for reaction. I've come to join those long-term bullish on oil (and see Tony Caldaro's two charts at bottom, on oil and natural gas - thanks again, Tony!), so the basic idea is that it'll push higher. But given the choppy advance, the Fibonacci level in this turn time window, and the overall weak economy, it's reasonable to expect a reaction that goes into a consolidation or correction. My daily and monthly charts of $WTIC are below, and the indicators are consistent with the possibility of a pullback.

It'll be bullish if oil pulls back, then returns to turn this Fibonacci level into support. But for now, we should respect that it's likely to represent a resistance level.

Tony Caldaro's charts, shown at bottom, suggest that both oil and natural gas have higher wave counts ahead. It's almost easier for me to see it in natural gas, since I could almost see the oil wave counts more bearishly (like a huge b-wave bear flag) - that's part of the reason for my issuing this post.

Natural gas poised to rise above resistance

The last time we focused on natural gas, it was in the process of getting support at my trendlines. Now it's making a test upward of the upper channel I've marked on my weekly $NatGas chart (at bottom below). This time, it's pushing up with the indicators looking more positive. That's even true for UNG (the natural gas ETF) which has gotten priced much closer to the commodity, interestingly (even if temporarily). It's possible that UNG is just starting a wave 3 of 3 up (or another type of good third-wave movement). So the KI$$ approach is to buy and stay long for a good while. The protective stop can be nearby if you prefer, although the classic stop-loss level us just under the prior swing low. If UNG and natural gas ($NatGas) continue upward from here, above the channel line and moving-average resistance, it'll be a good confirmation.

There's plenty of price overhang resistance too, so I'm viewing this as a longer-term swing position and won't mind some turbulence as long as I'm not stopped out. Hopefully the recent swings (which may be a 1,2,(1),(2) type movement) have done enough consolidation work to shake out weak hands and build a bullish base. Sure, I'd still prefer to see more volumes on the buying, up days ... that's the main reason I'm still slightly cautious. But it's looking more positive finally, so I'm in at this point!

PS - I checked Tony Caldaro's public charts on page 10, at http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987 (see links at right too). He's got it marked as having finished "b" wave down. So he's expecting a good wave "c" upward. That's very helpful to us in holding for a good swing long, too!

ChartsEdge trading commentary regarding market sectors and forecast correlations

This weekend Mike Korell has chosen to share at his public page a commentary about correlation of his forecasting tools with market sectors. Another new and interesting twist on using his forecasting tools for trading purposes (thanks again Mike)! This commentary is as it appears at his Daily Maps webpage, http://www.chartsedge.com/wp/:

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ChartsEdge: Sectors

Posted: November 28th, 2010 | Author: Mike Korell | Filed under: One-Day Market Map | No Comments »

Sectors on Monday
I decided to take a look at other sectors and how well they matched up to the BetaP data. I have always figured that the larger the market, the better would be the fit…. Not so true as I found out!

If a market is manipulated to any degree, that causes the relationship between the cause and effect to be skewed a bit. The S&P gets shoved around quite a bit actually. Small caps to a smaller degree. For example, the S&P has a Rho of .68 for the last month while the small caps have a Rho of .78. The correlation is obviously much higher.

Here is where it gets interesting… The best Correlation Coefficient I found was a .94 for oil and gas sector.

If I stick to Profunds sectors which are leveraged and have inverted versions, the sector choices for Monday are:

UKPIX - Ultra-short Japan
REPIX - Ultra Real Estate

Unfortunately, the BetaP shows OIl and Gas as flat on Monday.

Other high correlations include the US Dollar (which has no leveraged version at Profunds) and Treasury bond rates (once again, no leverage).

While I did not test all the funds, I thought I would mention the worst fit… the international fund. It had a Rho of a meager .62. If you think about it, thats not much worse than the S&P 500.

Natural gas also rises: time to consider being long with this stop loss protection

The sun seems to be starting to shine on natural gas. So as the sun rises, "natural gas also rises" (ouch, sorry! LOL) because it might have made its major cycle low. From the Elliott Wave perspective, and maybe from a cycle perspective, that cannot be confirmed until subsequent action proves it. But today saw a higher high being made with improved buying volumes in UNG (the natural gas ETF) which surely is constructive. Not the kinds of eye-popping buying volumes we'd want for a "c wave" up or trend reversal, but I'll rest more assured if that starts showing up in the next few days. If not, then UNG will encounter more resistance from its near-term moving averages above (see my daily chart of UNG, below). Also below is a chart of Tony Caldaro's (thanks again, Tony!) of the natural gas contract ($NATGAS) from his public chartlist available via his the Elliott Wave Lives On (Objective Elliott Wave) site. The provisional marking of a "b wave" low by Tony is additional support for the potential that natural gas (both $NATGAS that he charts (and I do too, as I posted with my trendlines recently here, use the "natural gas" link to locate) and UNG which I also track) have reversed trend and started uptrending.

Next question is how does one invest or trade it? I'll leave high-powered futures traders to figure out for themselves because they'll often leverage near versus longer-term contracts and options. For many more mainstream traders and investors, a basic fairly safe method is to go ahead and accumulate a long position such as in UNG, but maintain a stop loss at or just under the "b wave" lows. Some might want to place it a bit higher now, at the higher lows of the past several days on the theory that was a small second-wave low that shouldn't be revisited again. That's a matter of risk preference, as well as one's ability to monitor and re-accumulate once the uptrend re-establishes. This isn't the place for detailed trade management advice - it's more ancillary to the point that the low "should be finished"!

Investors and traders will also need to consider your timeframe and style for determining where and when to take profits. If this really is "the low" that many of us have been waiting for, then taking profits occasionally and buying dips should become much easier from the long side.

Natural gas positioned for bounce, or more; weekly & monthly chart views

I've been pointing out that natural gas was putting in a low that should be a cycle low. The ETF ($UNG) shows a reasonable pattern on its daily chart that can support reversal, because it pushed up above the prior swing high and now pulled back on lighter volume. But the buying volumes on the push up weren't as great as we really want, so that's a note of caution. One strategy would be to buy with a stop at Tuesday's low, or slightly under Tuesday's low. As for the real natural gas contract, my weekly and monthly charts of $NATGAS, below, show that price has bounced up after hitting trendlines on both charts. These indicia all combine to say that natural gas is poised in a manner where it really can rise again.

I'm trying to avoid making a really bad pun about natural gas bubbling up! And it's true there's overhead price resistance so this commodity will have a lot of work to do, getting attention from competition like crude oil which also has a bullish chart (even if it pulls back on a dollar corrective bounce). There's fundamental news about natural gas too, that should help its price move up as the heating season progresses in the northern hemisphere.

Natural gas tale of woe: might need another low (getting ready to buy)

We've been tracking natural gas ($NatGas) and the ETF, UNG, for the next big low buying opportunity. Good news, it's getting closer. Bad news, it's not quite there yet. Tony Caldaro has it marked in a way suggesting that. And my daily chart of UNG shows that, while buying interest has picked up, there isn't a reversal buy pattern yet. This does allow time to prepare for scaling in, however. Once we see new lows and/or a reversal buy setting up, expect to see serious buying volumes in the ETF ($UNG) leading to higher highs, then higher lows. This low cycle buying opportunity should last a good long time once it kicks in. So being patient will be worth it.

Ain't it a gas?! Natural gas making a good low to buy

Natural gas has repeatedly punished anyone who tried a buy-and-hold strategy - we've had to take swing trading gains by selling into rallies. Is that changing now? Looks like it may well be. After I remarked a few weeks ago that it looked like UNG (the natural gas ETF) was making a 4th-wave bounce liable to roll over to another low - it did. Now we're watching closely to buy the low because it looks like the best opportunity in a very, very long time is finally shaping up. There's positive divergence on my hourly and daily UNG charts (below). And borrowing from Tony Caldaro's Objective Elliott Wave charts of natural gas ($NatGas daily and weekly charts, which also show positive divergence, further below), it appears Tony's expecting the low to reverse upward for a good move, too. You can check out all Tony's charts, and his commentaries and blog discussions, at his "the Elliott Wave Lives On" site in the sites links listing at right.

If UNG can be successful reaching $14 again, that would be more than double its recent pricing around $6 (and $12 was also an important level in its descent, therefore another, more moderate target). But let's be realistic too. First it needs to confirm it's finished its low - and it might have, but I can't rule out the possibility of one remaining poke lower soon. Either way, UNG's first near-term target will be a bounce greater than 10%, to $6.76. In cash market trading today, UNG almost closed a gap recently left behind on its last price drop. Moving over today's high would help give it a more bullish chart pattern too. Positive divergence in indicators like the money flow (CMF) shows that significant money is becoming interested in UNG and natural gas at these levels and time. (The winter heating season is traditionally deemed bullish for natural gas.) Whenever UNG takes out $6.76, it should be on the road to higher levels.

So if you've been burnt by the "natural gas flame", get over it and start positioning for a long swing trade that can also support an investment position. Once we start seeing higher highs with good volumes on the buys, we'll know we're onto it and can adjust stop-loss orders accordingly (such as just under a higher low, for example). We'll KI$$ - Keep It Simple Swing - and keep an eye on it!

Natural gas poised to provide positive returns to swing trade investors

Time to change your point of view about natural gas! While I cannot guarantee its bullishness, of course, I can tell you the indicators have turned positive and it's poised at moving average support. The tick up this morning can be the beginning of a very nice wave 3 or C up, meaning a good move for swing trade investors. The logical stop-loss exit level for KI$$ (Keep It Simple Swings) traders is at yesterday's lows (do your own diligence of course). We'll have to work out target levels .... I'm keen to see if it can test back up to that $12 level in UNG (and whatever that means for $NatGas).

You can see the positive indicators and moving average support in the charts below. I know there's news about natural gas this morning as there's a move to shutter in some supplies because of the recent price drop. Maybe that will be a fundamental reason to go along with the technicals which I've been pointing out for some time. Now, let's not be complacent - there's always a risk. But it's looking like time to think in terms of buying the dips in natural gas. So with the usual reasonable trade protections - we're taking "the long view" right now.

Natural gas on the move - see if it'll bubble upward in new rally

Now that UNG (the natural gas ETF) is pushing above its recent range today, it'll be very nice if it continues upward to test the area from $9 to $12. For that to happens, we'd expect to see $NatGas push above $4.54 and its weekly Bollinger Band midline. The indicators suggest improved technical strength with some positive money flow. So we can start to think a cyclic low has been made and start to think of it being in rally mode again!

We wouldn't want to see it fall lower than approximately halfway back down into its recent trading range. Given its move today, I'm reasonably hopeful that natural gas and UNG are going to cycle higher for a good while. If we are really lucky, "the big low" is over and done and behind us. So we'll see - but first things first! It needs to continue upward in a way that carves out a new uptrend channel along with the indicators continuing to get more positive.

ChartsEdge BP map reminder, plus some market comments May 11

Folks, remember that the ChartsEdge beta particle based (trader mood) map for today is within Mike Korell's new full-week map. That's the one you can find the link for in my post Monday morning (see below, just under the euro post I did last night). It indicates a downslope today which may being an EOD (end of day) low underneath Monday's low. Since it also points lower into Thursday, swing players might want to play it defensively into Thursday. Just remember it also shows a steep curve up from Thursday into Friday with an end-of-week high over Monday's high. Of course no guarantees these will produce absolute price levels accordingly .... It's just how this week looks on that map.

Let's talk gold ... I pointed out a week or so ago as it broke out above its range trade. It did a little pullback, no surprise, just a consolidation really. And pushing up again. We don't have to think whether gold is going up against the dollar, or the euro, or whatever. It's going up on general principles due to uncertainty and fear! Of course the potential for currency inflation only helps! And don't forget that at times when currencies are in a "race to the bottom", gold will shine against all of them. Cyclically, our plan was to buy a low in gold before May. Well it's May now! Gold never hit a low spelling too much weakness; wherever you bought it, the general thinking is to hold on and wait. While I may not have one specific projection for gold's trajectory, the overall path looks positive for a good while to come.

I've talked about the agricultural commodities and buying a spring low. DAG as a simple ETF is one way to participate if you aren't reading commodities contracts or futures. Of course we should be on guard if it simply loses support of the recent lows instead. But spring is over and we want to see if we in face get a good summer rally on a simple long swing position. That's why I'll add the "KI$$" label to the post.

Same goes for UNG and natural gas. $NATGAS has been trying for a good swing low in order to make a new swing up. So it's another item we want to play accordingly for a nice swing long position.

So these are current thoughts about non-equities markets we can be working with. As for equities, we might be working with the first stages of a new wave up, but it deserves respect just in case it makes a double bottom (with a higher low or lower low) before it's really ready to fly. Still, with May 21 opex out there, it's tempting to think options will expire with the indices well over last week's lows. And don't forget to take a look at Terry Laundry's daily updates each morning too... As always - let's be careful out there. And happy market navigating!

Money flow turns a little positive in UNG with natural gas making potential swing low

Hey, remember UNG and natural gas?! Since I had been posting about the possibilities for another great buying opportunity swing low coming along, it made a low and started basing. Now I can't absolutely guarantee "that was it," but it's pretty easy to see this can be a good buy point with strategic stops to prevent loss if it does drop under the recent basing range levels. Check out the money flow indicator on the UNG daily chart - it's finally moved up to the positive area! And the monthly $NATGAS chart shows a very interesting rebound by the StochRSI indicator up from its midline - that's a very promising reading for this indicator.

My thought is that we might see $NATGAS get above $7, with UNG making a similar nice move up. Again, no guarantees of course. But my readers who've been waiting for natural gas to turn positive again, should take a look at this.

Natural gas just starting to smell better again! Close to a turn up if not already

It's been a while since we looked in on UNG and natural gas, but these charts will confirm why! If you look at the last posts I made on this topic (use the "Natural Gas" label to find them) you will see that I fully expected UNG to make fresh lows, along with $NATGAS making a higher swing low. These events have come to pass. Now what?

Well, I fully expect these events to create a great new swing long buying opportunity in UNG and/or $NATGAS. The big question being, are they ready now? While I cannot be 100% certain about it of course, I think we could possibly be there, and here's why. The RSI and MACD indicators have picked up, and so far UNG has made a higher low on the daily chart. The trading volumes have picked up too. I only wish the trading volumes showed bigger green bars! So that's my one cautionary note. For that matter, serious swing and position investors will want to see the 200-day moving average level out when price firms up too.

On the weekly charts, below, of both UNG and $NATGAS, the "CCI" indicator suggest that a cyclic low is either complete or soon to complete. And MACD on the $NATGAS weekly is testing around the zero line. (MACD on the daily UNG chart above has even seen its indicator cross up, although it remains below its own zero line.) All these things suggest that the turn is in progress. Cannot guarantee that one more new low won't be poked ... but I think it is time to start ringing the bell for natural gas traders to start looking for a good turn.

Stock market continues slippery for swing long entries; but UNG (natural gas) and DAG (agricultural commodities) coming into focus soon

Folks, you obviously can't prove anything by me, or by some of the cycles indications we've been seeing, although Andre Gratian may have different cycle views for his subscribers including the remaining potential for some type of pullback into the end of this week or early next week. Today we obviously didn't get a downslope as the ChartsEdge work was indicating - so there, says Ms. Market!! If you look at the McClellan Oscillator charts (at bottom below) you see that the Oscillator did bounce up off the midline area (and moving averages), consistent with the equities bounce we've seen. But the Summation Index is nearing overbought levels. So what's a swing trader to do?

As much as I've liked the idea of a March low, and am tempted to get impatient to say it must already have happened and let's hop on board what looks like a northbound train - I've got to urge continued restraint. Maybe today's push over the 1168 level does say we're going to 1176/1177, okay I can see that. Since obviously, we got to 1174 so it's just a blip away (and notice that 1176 is Tony Caldaro's next pivot after his 1168 pivot - see Tony's Elliott Wave Lives On site and update (feed) at right side of the page here). But with the way the indicators look and the timing relative to the common dip into late month (which would be this upcoming weekend), I really feel that we should be patient to look for more of a pullback after this test of the 1176. So in terms of price I'm still looking for (hoping for!) a test toward the mid-1140's, and in terms of time I'm still looking for a dip by the end of this month.

Naturally I hope I'm not wrong on this, and I don't want to let my readers down with misdirection on where the markets are heading. So I'm just being candid about this; and, it's obvious that people have figured out this market is much more bullish than many were saying just a month or two ago. Once we do feel comfortable about a good entry, it looks like getting toward SPX 1225 area should be a good goal, at least. There might be turbulence there, as you can see on the SPX weekly chart (below) that's where the 200-week moving average is. The 200-week isn't as widely used but it can provide a level to watch when we get there - as I feel certain we will, somewhat later this year.

Meanwhile, I feel that good swing buy opportunities are shaping up in natural gas (UNG) and agricultural commodities (DAG). I don't have specific time or price targets for buying these, but can allow this a bit of leeway. Because in both cases, I'm looking for a relatively long-term swing long position that should last at least a few weeks and maybe a matter of months. So, even if getting on board the equities train is dicey for the swing traders, I can put these ideas out there as good ones to start focusing on. It may still be a day or so before UNG and DAG are ready to start swinging upward; but it's not a bad idea to start preparing for swing long positions either in these ETF's or in the underlying commodities. [As always, in the exercise of my best take on 'em!]

Technical trio of charts possible tell on equities teetering at T Theory crest

Here's a technical trio of equities market internals charts: NYAD (advance/decline), NYMO (McClellan Oscillator), and TRIN (Arms index). It's a way of looking to see the validity of the idea - from Terry Laundry's T Theory and other sources - that the stock market is cresting and about to dive to the next good low. The NYMO in particular shows negative divergence that suggests this - and the TRIN looks ready too. The NYAD has been climbing its upper Bollinger Band. This evening I was already thinkng about how to address these ideas, and then read the following comments from a reader:

Ariel,
You've been saying there should be a better entry point for equities and commods in March. Are you now saying 1127 is going to be the low? So on the next very shallow pullback is when you're going to load up? I don't understand how the Feb low was not the better low to be buying. March has been one straight line up with barely any corrections. Anyway, can you clarify again when you would be buying AG, NG, gold, oil, equities?
thx!

Those thoughts have been on my mind too! In early January, we were thinking of a high mid-January that would lead to a March low, then up into May. Overall, so far so good, except the low that we should be seeing from today's high now looks like it will be a higher low (higher than 1086), not a lower low. What do we do with this?!

Well first we have to make sure the SPX will get support at 1126/1127. That's about 40 SPX points above the 1086. Yes, it would feel better to have gotten the buy at 1086/1092. But we can't let that hold us back from buying when it gives signs of turning up again. Because looking back at up to 40 points, won't help if it prevents us from being on board for a potentially HUGE move up.

Gold is dicey now because there's the possibility that it's going to start traveling inverse to stocks. We want to buy a low in gold either this month or next - and the trick will be seeing if it drops now along with stocks, or bounces. We don't want to be in a hurry to buy gold, as far as I can tell.

The agricultural commodities - the safest way to play these is with ETFs and trade them like anything else. Unless you're experienced in trading agricultural futures markets. One is DAG, and there are others. But when? The safest way here too, is to look for a reversal pattern. We need to keep an eye on for that.

Same for UNG and natural gas. I'm not surprised about natural gas dropping, I posted a while ago showing that I expected it. We need to keep an eye on there (use the "Natural Gas" label for prior posts on this.)

Oil may be in a way the most interesting because it's got the potential to make a surprising low (even if it does mimic the banking index by tagging its own slightly higher Fib first).

This is just a quick recap and I'll be addressing each of these in subsequent posts. Back to equities - might the market go deeper than 1126/1127 SPX? Possible, just not guaranteed. The way it moves into its next low will help illuminate the wave count. I've puzzled over it many, many times, without a clearly satisfactory answer. My basic theories are a large B wave up which could go in the neighborhood of 1300 SPX. Or a large "Wave V" bull market that goes to new highs, whether in a normal impulse or a very large ending diagonal.

I hope this helps! I know it's difficult when it turns out scripts aren't 100% accurate for how the markets actually flow. But the overall pattern is working out - that's better than many other "expert analysts" can say, as their uber-bearish views have proven too early (possibly wrong, but probably just too early).