But, let’s face it, nobody is going to write into Market Minute<\/em> feedback and talk about what a genius I am for helping them make 29 cents on the “widow maker” trade.<\/p>\n In fact, based on the feedback from my prior natural gas essays, folks are more inclined to question my intelligence.<\/p>\n Like this gentleman, who responded to last month’s essay…<\/p>\n “You clearly have no understanding of economics, or the laws of supply and demand when it comes to commodities. We have a glut of natural gas in the United States. The price will stay low for a very long time. Not everything can be explained by your charts.”<\/p>\n<\/blockquote>\n Now, I don’t want to appear argumentative. But, I do actually have a degree in economics.<\/p>\n Though, it’s from a California university. So, grain of salt on that one.<\/p>\n And, while it’s true that we do have a record high inventory of natural gas, as my friend – and commodity expert – Rick Rule is fond of saying, the cure for low prices for a commodity is low prices.<\/p>\n The gentleman is right, however, that not everything can be explained by the charts.<\/p>\n But, outside of a crystal ball, a chart is arguably the best illustration of the psychology affecting the current price of a stock or asset.<\/p>\n The problem, though, is that – like art – a chart is subject to interpretation. Two people can look at the same chart. And one can see it as bearish while the other has a bullish interpretation.<\/p>\n But, if you look at the following chart of natural gas and see it as bearish, then you’re just nuts.<\/p>\n Take a look…<\/p>\n <\/p>\n I’ve drawn the setup a bit differently than we showed it last month. But, it remains bullish.<\/p>\n After bottoming at $2 in early April, the price of natural gas has been grinding higher – making a series of higher lows on the chart and hitting resistance multiple times near the $2.80 level.<\/p>\n This action has formed an ascending triangle pattern – which usually resolves with a breakout to the upside.<\/p>\n All of the various moving average lines are coiled together, building energy to fuel the next big move. And, the moving averages are in a bullish configuration – with the 9-day EMA above the 20-day EMA, and the 20-day EMA above the 50-day MA.<\/p>\n So, as long as natural gas doesn’t fall below the August low near $2.45, the odds favor a bullish move.<\/p>\n <\/p>\n Free Trading Resources<\/strong><\/p>\n Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/p><\/div>\n<\/div>\n <\/p>\n Natural gas has been in this low-level trading range for so long, that there’s plenty of pent-up energy to fuel a move up towards $5. And, that move could happen just as fast as the decline from mid-December to mid-February.<\/p>\n In other words, if natural gas can make a decisive breakout above $2.80, then there’s a good chance it could run as high as $5 over the next two months.<\/p>\n I could be wrong, of course. A breakdown below $2.45 changes the picture from bullish to bearish.<\/p>\n But, in its current pattern, the “widow maker” looks quite bullish to me.<\/p>\n Best regards & good trading,<\/p>\n Jeff Clark<\/p>\n <\/p>\n\n
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