Trade Focus update - Natural Gas

Click to enlarge chart

This is an excerpt from this week’s Trade Focus. It was written in the early afternoon on Thursday September 24.

Natural Gas (Nov.) – Two weeks ago we introduced this marked to our coverage and actually saw a suggested long entry be elected. That is from a price level of 4025. We noted last week that the rather quick run up had touched against two points of resistance and that some participants might choose to reduce the size of the long entry position. Remaining long entries from the initial suggestion we believe can raise stop protection to intraday penetration of 4369 or a close at or below 4425. We also suggested last week that new or additional long entries could be initiated with intraday penetration of 4830 which has been penetrated. Suggested long entries from this entry approach we believe should place stop protection at intraday penetration of 4540. We believe the next area to expect stiff resistance should be 5320 or so and some long entrants may choose to reduce position size in that price area. Retracement areas of resistance are approx.: 4874 (hit) 5308; 5743. Extension targets active are approx.: 5019; 5155 and approx.: 5205; 5381.

For those not on our Trade Focus email list you may sign up for a trial at jmajer@mfglobal.com

We send the email version of the weekly Trade Focus the day it is written. We post it on to the website at www.cbandsbrokerage.com after additional prep work and compliance procedures which usually takes an extra day.

Let us know if there are any questions comments or even better if there are any answers you may have.

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Natural Gas Fibonacci

click chart to enlarge

This is an update to the Natural Gas price move we have been covering the past week or so. By now those who have been reading this blog spot have seen our use of Fibonacci retracements and extensions. As can be seen in this daily chart of the November Natural Gas futures the first .618 retracement level of significance has been reached at today’s high (Wed. 9/16/09). It’s still open as we prepare this and could continue to new daily highs, but we have learned through experience the value of these ratios.

This also doesn’t mean that the move is over. It is, though, something traders should not only be aware of but perhaps use as a barometer for adjusting their trading positions. This could mean adjusting quantity or stops. It may mean for some traders that new trade initiation is in order. It could also be to trade against it or to now watch for a new signal if and when the level is penetrated.

Whatever it may be, we felt it notable and important enough to get the word out that this level of significance has been hit.


Happy trading

Jeff and Diego

CB&S
Division of MF Global Inc.

jmajer@mfglobal.com
dpilar@mfglobal.com

312 261-7380
800 321-5810
www.cbandsbrokerage.com

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Natural Gas Follow up and Follow Through

click to enlarge charts

We said the other day when first mentioning the Natural Gas market situation that we would be following up. Above are updated daily charts for the October and November futures contracts.

As can be seen there was a nice move upward off this recent low point. So far it has stopped against its .500 point of the most recent and last wave down. Interestingly, the downward correction of this first upthrust held at the .500 support point too.

We have heard on the television financial news station this morning that one of the big investment banks has told its clients that they expect natural gas prices to reach 6.000 by year end. We are not passing judgment on the prediction but thought very worthy of mention.

We have said that the Natural Gas market has been known to be volatile in nature. It is possible, though, that this could be the beginning of a prolonged move. At least prolonged from the viewpoint of futures markets.

Is this something that should be considered for participation? Only you, the individual investor or trader can answer that question. If we can help in determining that for you or in determining possible approaches to this market we would be pleased to do so.

jmajer@mfglobal.com
312 261-7380
800 321-5810

Jeff Majer
Diego Pilar

CB&S Division
MF Global Inc.

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Natural Gas

click charts to enlarge

The charts above are of the daily November Natural Gas and the monthly Natural Gas futures contract.

While there has been an incredibly steep decline after reaching a high point in July of 2008 Natural Gas appears to be signaling it may be ready for at least a retracement bounce of some amount. There is an upward reversal showing on the daily chart with the possibility being set up on the monthly. The weekly does not display this same pattern, however.

It also appears to us that the structure of the move off the low as seen on the daily chart has the potential of producing further upward thrust. We are including here what we said in this week’s Trade Focus which was written yesterday the 10th. The market has already moved somewhat away from our price suggestion and actually has approached some of its first levels of resistance, but Natural Gas is known to be volatile. We will be updating on this situation as it progresses.

From Trade Focus - Sept 10th
Natural Gas (Nov.) – This is a new market we are adding this week. It appears that there has been a reversal off the recent low on a daily basis. It is a bit more pronounced on the October contract but the October is due to expire September 28. This tends to be a rather volatile market, perhaps even more so than crude oil; therefore it may not be for everyone. But after a prolonged down trend it appears natural gas is showing signs of at least placing a temporary bottom. We believe we can suggest that long entries can be initiated at a price level of 4025 or lower and that stop protection should be intraday penetration of 3765. Retracement resistance levels are approx.: 4114; 4308; 4503. The next series above is approx.: 4252; 4495; 4738. Since this has been such a steep decline over many months there will be additional levels above the market that will be stated here as they approach.

If interested in joining the weekly Trade Focus email list so that it will reach you by Thursday afternoon let us know. We will be happy to oblige.

As always, send any comments or observations to jmajer@mfglobal.com.

If you need to establish your trading account you can contact us directly at the email address above or click on this link:

http://www.cbandsbrokerage.com/openanaccount.html

Or call:
312 261-7380
800 321-5810

Jeff Majer
Diego Pilar
CB&S Division

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.