Shortly after today’s mid-session trade ideas video was posted, once again highlighting the lower-most trendline support level that /NG had been clinging to for the last couple of day, nat gas futures went on to print a 60-minute candlestick close below that support level, thereby triggering a sell signal which immediately opened the door to an impulsive thrust down as the cluster of stops on long-side trades were hit coupled with short-sellers jumping in on the confirmed break of support (as per the yellow scenario posted yesterday in the first chart below):

That thrust down hit the suggested stop of 62.49 on the UGAZ swing trade for a beta-adjusted loss of 4.2% – 6% (total loss of 17.1% x the 0.25-0.35 beta-adjustment to the position size to account for both the 300% leverage on UGAZ as well as the above-average volatility of natural gas). UGAZ and all associated posts for this trade will now be moved to the Completed Trades archives for future reference.

UGAZ 60m Jan 16th

UGAZ 60m Jan 16th

For those giving a position a little more room or considering a new long trade in natural gas, this marginal (so far) new low is a divergent low (i.e.- positive or bullish divergence) although it is what I refer to as “unconfirmed” positive divergence at the indicators are still pointed lower. Should nat gas reverse soon, putting in higher lows on both the RSI & PPO with a bullish crossover on the PPO (to effectively put in a higher low), the divergence would then be ‘confirmed’. As such, I will continue to monitor natural gas for another potential entry.