NGH13 – Natural Gas (NYMEX) (Last:3.273)

I was persuaded by discussion in the chat room yesterday to give Natural Gas futures more coverage, since a contract margined for about $800 would seem to offer a pretty good bang for the buck.  That said, we shouldn’t have any illusions about catching a major trend, since this vehicle has been chopping and thrashing within an 80-cent range for more than a year.  That won’t prevent our jumping on promising trades via camouflage and trading both sides of the market, however.  For now, that implies zooming down to the five-minute chart, where ‘external’ peaks nicely suited to our purpose have begun to take shape. The one I have in mind lies at 3.258, and any b-c pullback from just above it could yield the kind of very low-risk entry opportunity we thrive on.  I’ve sketched it out hypothetically for the benefit of night owls, since this trade has a chance of triggering in the wee hours. _______ UPDATE (10:47 a.m. EST):  The first camo ‘buy’ signal occurred at 3.264 at around 5:20 a.m. EST. On the 5-minute chart, the coordinates are as follows: A=3.252 (4:40 a.m.): B=3.265 (5:05 a.m.); C=3.260.  You’ll notice that point ‘C’ low blends traits of the ‘atrocity’ low with what could initially have been mistaken for a fine single bar.  This set-up was good enough for government work, for sure. More seriously, and putting the pattern’s point C flaw aside, you will rarely go wrong buying impulsive rallies that are this subtle, especially if you do so early in the life of the new trend.  I am not establishing tracking guidance, however, because of the silly time of day the opportunity occurred, and because of the somewhat dubious provenance of point ‘C’.  I’ve refreshed the chart to show how the set-up developed.