EW analysis - NG long term interpretation
The post with the short term analysis for NG has gotten quite cluttered.
So today I start a knew thread with more of a long term analysis.
Unfortunately commodities most often don't adhere to the five wave pattern of the impulsive movement. Commodities rather form connected big three wave moves.
So I like the idea that we are in wave C of a bigger wave Y down.
Problem with a wave Y is, it could be finished already.
Why I still prefare the interpretation that it is not the bottom is that fact, that for one the five wave pattern doesn't look finished and we didn't really see a volume explosion at the bottom.
On the other hand the postion of the commercials due to the CoT-Report is quite extrem. So both scenarios are possible.
For the shorter time frame we will definetely look to the upside.
The bottom search was detail work.
Now updates will come with a reduced frequency.
So today I start a knew thread with more of a long term analysis.
Unfortunately commodities most often don't adhere to the five wave pattern of the impulsive movement. Commodities rather form connected big three wave moves.
So I like the idea that we are in wave C of a bigger wave Y down.
Problem with a wave Y is, it could be finished already.
Why I still prefare the interpretation that it is not the bottom is that fact, that for one the five wave pattern doesn't look finished and we didn't really see a volume explosion at the bottom.
On the other hand the postion of the commercials due to the CoT-Report is quite extrem. So both scenarios are possible.
For the shorter time frame we will definetely look to the upside.
The bottom search was detail work.
Now updates will come with a reduced frequency.
Comment:
I guess it is time for another update in NG.
Unfortunately the correction went way to far. So there is sufficient cause to doubt the above interpretation.
Unfortunately that leaves us with a slew of different options. I will put them down from least to most likely.
Looking at the current CoT-positions of the commercials it is not very likely that a big downturn is in the books. So the least possible interpretation is, that wave (4) in red is already finished and we are looking to wave 5 to the downside.
It is still possible that the correction was wave b of the wave (4) in red. But normaly wave b doesn't correct more than 61.8 of the preceding wave a.
This leads to another option. Maybe the downward movement has finished all together and we have seen a wave 1 and now a 2 of a new impulsive move that could lead to over 14 USD. A wave two can correct 99.9 of the preceding wave one. But it is not very likely to surpass the 61.8 retracement and even less likely to go beyont the 78.6 retracement.
So the most likely interpretation for now is that wave a of red (4) developed in 3 waves and an expanded flat formation is forming, meaning that wave b will lead to new lows at approximately 2.039 or 1.867 if it gets exuberant 1.649.
Looking at seasonality suggests that we should see rising prices at the latest beginning late march/early april.
Unfortunately the correction went way to far. So there is sufficient cause to doubt the above interpretation.
Unfortunately that leaves us with a slew of different options. I will put them down from least to most likely.
Looking at the current CoT-positions of the commercials it is not very likely that a big downturn is in the books. So the least possible interpretation is, that wave (4) in red is already finished and we are looking to wave 5 to the downside.
It is still possible that the correction was wave b of the wave (4) in red. But normaly wave b doesn't correct more than 61.8 of the preceding wave a.
This leads to another option. Maybe the downward movement has finished all together and we have seen a wave 1 and now a 2 of a new impulsive move that could lead to over 14 USD. A wave two can correct 99.9 of the preceding wave one. But it is not very likely to surpass the 61.8 retracement and even less likely to go beyont the 78.6 retracement.
So the most likely interpretation for now is that wave a of red (4) developed in 3 waves and an expanded flat formation is forming, meaning that wave b will lead to new lows at approximately 2.039 or 1.867 if it gets exuberant 1.649.
Looking at seasonality suggests that we should see rising prices at the latest beginning late march/early april.
Comment:
It's been some time since the last update. I had been very busy at work.
Due to the strong move to the downside there are now only 2 options left.
Wave 4 can turn out as an expanded flat. This would indicate underlying weakness. Wave c of 4 would probably only reach about 3.6 USD.
Second interpretation would indicate underlying strength. It would mean, that wave 4 ended early march and we see (or probably have seen) all of the expected wave 5 and are now looking toward a new up move, that should propell NG to new highs over 12 USD.
Due to the strong move to the downside there are now only 2 options left.
Wave 4 can turn out as an expanded flat. This would indicate underlying weakness. Wave c of 4 would probably only reach about 3.6 USD.
Second interpretation would indicate underlying strength. It would mean, that wave 4 ended early march and we see (or probably have seen) all of the expected wave 5 and are now looking toward a new up move, that should propell NG to new highs over 12 USD.
Comment:
The second alternative would look like this. Be aware that it could also be an extended wave 3, so that one more low would be possible.
When we look at the CoT-positioning of the commercials we can see, that the net-long position reached a level not seen since late 2019. That indicates future strength. So I think, that this scenario could actually be unfolding.
Unfortunately NG is extremely volatile, which makes counting waves difficult.
And only when NG crosses 4.3 USD can we be (quite) sure, that the second variant is happening.
No matter which way NG will take. The next weeks should see higher prices. That also conforms with seasonality.
When we look at the CoT-positioning of the commercials we can see, that the net-long position reached a level not seen since late 2019. That indicates future strength. So I think, that this scenario could actually be unfolding.
Unfortunately NG is extremely volatile, which makes counting waves difficult.
And only when NG crosses 4.3 USD can we be (quite) sure, that the second variant is happening.
No matter which way NG will take. The next weeks should see higher prices. That also conforms with seasonality.
I still believe, that we are in a wave 4 correction to the upside.
The impulsive move from februarys low would then be labeled as Wave a of this wave 4 correction.
Yesterday's large move to the downside was either all of wave b or just wave a of b. Unfortunately this is hard to tell due to the large gap. Because of the deep correction my prefered interpretation is that wave a of b is obscured by the gap and we saw wave c in yesterday's trading.
Then we would look at additional potential to the upside.
Otherwise we would look further to the downside for the rest of the week to complete wave c of b.