On Sep
tember 5, we observed a new, large pattern in the natural gas futures whose midpoint at 3.072 might reward a tightly-stopped short sale. After peaking at 3.070, the futures have dropped enough to deliver profits of more than $1400 per contract to traders who took the risk. The pattern’s ‘D’ target of 3.534 will remain in play so long as the ‘C’ point of 2.610 is not revisited in the meantime. The thrust up to the midpoint is itself a classic impulse wave, and the subsequent decline puts us into position to form a ‘C’ point for that pattern. If the low of 2.856 holds, the ‘X’ entry point will be 2.962, although the futures appear to be inching toward that low tonight, so traders will have to keep track and recalculate if necessary. If it does hold, neither the midpoint nor the ‘D’ target will be tradeable, as they are both almost exactly equal to important prior highs (specifically, the ‘B’ points of the two patterns we are looking at right now). But a somewhat lower ‘C’ will ‘hide’ both pivots and make them eligible for short-selling. (Posted by Doug “harry” McLagan)
