In the last update on natural gas in Thursday’s video, /NG was highlighted backtesting the near-term price channel off the Oct 11th lows. /NG was unable to regain the price channel and then went on to put in a lower high on Friday followed by more tests of the 2.297 support level on Friday, last night and once again today, finally breaking that support level followed by an immediate & impulsively leg down which also took out the 2.264 support level as well.

NG 60m Oct 21st

NG 60m Oct 21st

Natural gas futures are still holding above the 2.205 support & still above the Oct 11th low but today’s drop certainly isn’t a normal pullback within the recent short-term uptrend as that has clearly been invalidated. Should /NG hold above the October 11th reaction low & go on to take out last week’s highs, the potential for another leg higher is possible while a break below that Oct 11th low would likely open the door for more downside. The chart below provides some statistics on the returns for natural gas followed the other 3% drops over the past 12 months.

Nat Gas statistics Oct 21st

Nat Gas statistics Oct 21st

 

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