Related Topics
Energy , Trading

What We Said Beforehand About the 80-percent plus Decline in Natural Gas

by Robert Folsom
Updated: April 28, 2023

Welcome to Chart of the Day. I'm Robert Folsom.

What We Said Beforehand About the 80-percent plus Decline in Natural Gas

Let's talk about the price of natural gas via this daily chart, from the August 2022 high through the recent lows in April 2023.

This August price peak broke just above $10, a level the natural gas market had last seen in July 2008. From an Elliott wave perspective it showed all the signs of a longer-term high, which is exactly why EWI's Energy Analyst Steve Craig alerted Global Market Perspective subscribers in the August 2022 issue that, "The next sustained move should be a five-wave decline..."

The peak came 10 trading days later on August 23. In turn, natural gas fell to below $5 through late October. November saw a comparatively modest retracement, and this is where price stood on December 2, the day that month's issue of Global Market Perspective published.

Steve Craig's commentary that month did note an alternate Elliott count, as our analysts often do, but what he emphasized to subscribers was,

"...the better interpretation at this juncture is to label the price action from the 10.028 high as waves 1 and 2 ... in anticipation of a powerful third-wave decline."

From there, price did bounce but quickly resumed the downtrend into the New Year. The January issue of Global Market Perspective published on the sixth, when Steve Craig said this to subscribers:

"Natural Gas paid little heed to the demand surge created by the first major arctic air mass of the season that swept across the eastern two-thirds of the U.S. ahead of the holidays. The plunge into new low territory was in line with our expectations and the market has completely erased 2022's massive rally ... renewed selling pressure could get intense as wave 3 continues to unfold."

Intense selling pressure did indeed continue down to lows under $2, an 80%-plus decline from the August 2022 peak.

This is where I say, not all forecasts work out this way. Global Market Perspective offers monthly analysis and forecasts of major financial markets world-wide, from energy to interest rates to currencies to stocks and more. Please see below for subscription details.

Read Our Forecasts Now … or Wait Till "Old News" Headlines Later

The point is to be on the right side of the opportunity. You've just seen a powerful example of forecasting a huge trend reversal before it unfolds: Global Market Perspective subscribers were not surprised by the big fall in natural gas.

If you need comprehensive coverage of world currencies, stock indexes, interest rates, metals, energy and more -- Global Market Perspective delivers that directly to your screen.