UNG Update

I wish this one were as simple as some of the other signals, if it was I wouldn't need so many charts to try to put it altogether.

Longer term I think UNG/Natural gas has an interesting future, the leaders of one bull market are rarely the leaders of the next. Consider Tech in the 1990's-2000, it revolutionized life today. Many of us probably didn't have cell phones 15 years ago, today digital convergence has made a cell phone indispensable, it's your watch, calendar, phone, email, camera, and everything else you essentially can't live without, but did Tech lead the 2002/2003 -2007 bull market? No , Housing and Consumer discretionary spending because of rising home prices did. You might say Social media has led this market, who knows what leads the next market, all I know for sure is after the Tech revolution I never would have suspected boring housing would lead the next market.

The oil price narrative from the US/Saudi's crushing Russia to the Saudis crushing the US shale industry has flip-flopped back and forth, today there's a new piece out that it is indeed to punish the Russians, but more directly over Syria than Ukraine, who really knows, but what we do know is the US has an abundance of natural gas, who's to say there isn't a pivot toward NG , US Energy independence and thus NG leading the next bull market? Our longer term analysis has suggested that NG is looking like it is setting up for a monster primary uptrend, perhaps even a secular bull.

Near term the Nat. Gas Inventories are tomorrow morning (EIA), so while Energy broadly isn't doing very well today, unlike the last 3 days in which it has led the market and all S&P sectors, I don't know if that bleeds over to Nat. Gas or not, what has bled over this year is an unseasonably warm winter.

Here are the charts which do look interesting, although no to the same degree the USO chart looked before its rally (best 3-day move in 6 years).

 On a 2-day chart UNG has a 2.5 month range which is just inviting head fake moves, in this case a Crazy Ivan shakeout (yellow), first under the range, then above the range, then a break below the range after taking out all nearby orders/stops.

 My interpretation may be off here, but it's an interpretation of UNG's 2-day chart with what looks like an exhaustion gap down on rising volume followed by a rounding bottom and a chart pattern similar to a bullish Rising 3 Methods before the support of that price pattern sees what I believe is a head fake / Stop run (at the red arrow on increasing volume / "HF") which just so happens to be right at a psychological magnet for stops/orders, etc. at the whole number of $14, note the volume surge as stops/orders are ht on the break of $14.

 Here's the same on a daily chart of UNG, again whether the 3 methods interpretation is valid or not (it would be helpful for a head fake move), there's clear support and right at the $14 level so you know where most traders are going to gravitate to, the whole number of $14 whether it be stops or any other action. It appears stops/orders were hit on the increasing volume of that day, since it has been rather quiet.

 The 15 min 3C chart shows the range (red), the divergence for the Crazy Ivan below the range and then the negative divegrence above the range followed by the decline and exhaustion gap and a leading positive divegrence in the area of the head fake move (suspected). This would suggest a fairly bullish looking bottom set up here.

 The 10 min chart has the exact same features or multiple timeframe confirmation.

 And the 5 min chart makes sense as well from the move down off the highs to the positive divergence below the support area/$14

 Here's an intraday look of the break below support / $14 and the volume surge, since then pretty quiet which is where we often see the heaviest underlying activity as to not attract attention.

 The long term 4 hour Natural Gas Futures also has a positive divegrence in the same area.

As for the 5 min chart, it has been positive with what looks like a short term pullback, maybe in front of the EIA inventories tomorrow, maybe related to something else, but the most recent positive divegrence didn't escape my notice.

 The 7 min chart also has a similar theme of a strong positive and short term pulback

As does the 15 min chart.

These divergences would be considered as having "plenty of gas in the tank" for an upside move.

Finally just as a quick additional look, I grabbed a few UGAZ charts as the leveraged ETFs often have stronger/earlier signals (3x long UNG/Nat. Gas)

The 2 min chart with a clear leading positive divergence.

 Intermediate 10 min chart with the same

And the longer term 60 min with the last part of the Crazy Ivan to the far left, the gap and a trend of a larger positive divegrence. To me these may be the cleanest, clearest charts and it looks like a base set up.