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Natural Gas: When 5 Waves Down Mean... Up!

Even "messy" market corrections show a pattern

by Vadim Pokhlebkin
Updated: October 13, 2017

When you look at a long-term chart of natural gas prices, there's little room for excitement. The price today stands about where it was last October. Or last November. Or in February... June... August...

Which is to say, natural gas has been mired in a long sideways move, with prices in an ever-tightening range -- especially over the past three or four months.

Regardless of your method, it's hard to forecast a range-bound market. Range-bound price moves are corrective, and even Elliott wave analysis includes more than a dozen corrective chart patterns and combinations.

Yet, even market corrections have internal order, despite their "messy" appearance.

On October 9, our Energy Pro Service editor Steve Craig zoomed in on the short-term trend in nat gas -- and saw a small-degree Elliott wave impulse within a larger corrective pattern. After five waves end, the market reverses, says the Elliott wave model. Steve's forecast? Up.

Natural Gas Chart 1

Posted On: October 09, 2017 02:17 PM Natural Gas slid a bit lower and should be in the final throes of the decline. above 2.886 would open the possibility that a bottom is in place.

This chart shows you where natural gas prices found themselves three days later:

Natural Gas Chart 2

Yes, on October 12, e U.S. Energy Information Administration report showed that total stocks of domestic supplies of natural gas "now stand at 3.595 trillion cubic feet, down 153 billion cubic feet from a year ago, and 8 billion cubic feet below the five-year average." (MarketWatch)

Yet, as it's often the case, chart patterns came first -- and the news of "bullish" fundamentals followed.

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