UNG while I'm waiting

I'm loading up the Leading Indicators Layout, because the SPY Arbitrage which is a quick way to check for market manipulation is 30 mins. delayed, I need to look at the real charts that give us better, more detailed information any way.

I have no doubt of what I'll find as the 3C charts are crumbling under price, but I'm more curious as to what mechanism they're using and perhaps what the play will be (a gap down or some other play?).

I figured while I was waiting I'd show you the UNG charts as I called it out earlier as an add-to (in many cases, a partial profits replacement of shares) and for some a new long term / long position.

 At the yellow arrows we have the two most important head fake moves for UNG. Remember a head fake move is excellent timing ads they tend to occur in about 80% of reversals and they tend to occur right before the actual reversal. The first head fake was a false breakout and that pulled price back significantly (that is what a head fake move is meant to do, add momentum to the pullback or rally) and allowed a large "W" base to be created. I suspected back then that price would have to gather steam one more time before UNG could move from a stage 1 base to a stage 2 breakout/trend.

The second head fake was April 18th on a very strong move up after the Thursday EIA Natural gas report, this was more than a 5% move and as you can see from this post on that day, April 18th, "UNG Position Management" , I didn't want to let the entire UNG position go because I wouldn't have been able to buy it back (I have an automatic 20% position size limit on any position and since UNG was bought at much lower prices and the profits moved the entire position well over the 20% lock, if sold, I could never replace the number of shares. I also believe in having the majority of a core position in the direction of highest probabilities so any trading around that position would have to be a minor position. To make a long story short, this day was strong and looked like a breakout to any one watching it, but 3C told us there was heavy profit taking/selling so I decided to take 25% off the table, let it pullback and add the 25% back, allowing me/us to make more profit on the trade.

Since then we've been waiting for that moment to add back the shares which I believe we are now at.

The first head fake move allowed a significant bace/accumulation to take place, I suspect the second head fake of April 18th will be just as important and likely lead us to our stage 2 breakout "Mark Up".

 Here's the actual day, April 18th, for any one trained in classic Technical Analysis this was a breakout day and to be bought, however we were CORRECTLY selling and taking profits, you'll see why.

The recent pullback was more extreme than UNG's normal character, I said I thought  this would happen at least a week ago, I believe all weak hands needed to be shaken out of UNG before they take it higher and this lower low is a head fake move in its own right; note the volume as weak hands were shaken out on that day-not only a lower low, but a very emotionally stirring day forcing some to stop out based on little more than fear.

 In fact it was this 2-day Trend Channel Chart that I had shown in an update and I said, "This normally would hold the trend in UNG, but if there's a break of the Trend Channel, I would not sell UNG unless 3C confirmed weakness", it did not.
 The 15 min 3C chart shows 3C making higher highs with price, this is 3C/Price trend confirmation, telling us there's no significant problems to be worried about, however at the yellow arrow 3C makes a clear negative divergence in to the highest high, then makes another at a follow up test.

 Short term we look for new divergences such as a transition from this negative sending price lower to a positive during a pullback, on the fastest charts which are the 1-3 min intraday. These are not the most important charts in terms of the size of the money flow, but the divergence has to start somewhere and the fastest charts pick it up first.

 This 3 min chart shows the concept of "Migration of the divergence", if the divergence is strong enough (has enough underlying money flow), it will migrate to longer charts and this way we can tell how strong the actual accumulation or distribution is. The 3 min chart is clearly leading positive from the negative (second high) test. Note even this smaller move to test the former high has a head fake move with a gap up above resistance causing longs to buy, then the move fails just as 3C shows us with a negative divergence and sends price lower causing new longs to sell at a loss, adding more supply and thus more momentum to the downside move. This is one of the major reasons we see head fake moves so often. If you haven't already read the two articles, at the top right of the member's site I have links to my two articles, "Understanding the Head Fake Move-How Technical Analysis Went From an Asset to a Trap" and Part 2, "Motivation".

 The 10 min chart has migration as well as it is leading positive.  To the left at the first red arrow we have the breakout move, 3C is very clear that this was a false move, thus we took profits as you can see here. The area in red shows confirmation of the down trend, there was no accumulation on this chart so the next high was likely to fail as it did with another negative divergence, but now we have a large relative divergence as 3C is higher, even though price itself is lower than the relative compared areas and it is also leading positive, which is an even stronger signal.

 The 60 min chart is exceptionally important and shows heavy flows of underlying funds, the negative divergences are very clear as is the positive divergence that has formed a new base.

The even more important 4 hour chart shows most of UNG's base, the first head fake / false breakout leading to the large "W" accumulation area and the last head fake breakout leading to this current pullback.

I didn't think UNG could breakout on the 18th in any case because the move was too extended without a chance to knock out weak hands or take a breather and accumulate strength so this not only makes sense, I think it puts UNG in a very strong position moving forward.