Parabolic Moves in Natural Gas

Today we are going to take a look at December Natural Gas

What we saw yesterday was a face-peeling move to the upside.  The market had its largest gain in nearly 14 years with an 18% gain due to an indication that we were at a long time low of natural gas supplies combined with reports of cold weather ahead.

Today we are seeing an equally wicked move to the downside… down 15%.

This is some hair raising price action in Natural Gas.

Each penny is about $10,000 a point, so we’ve moved about $14,000 per contract, and if you were short that market, that is what we call a classic face peel scenario.

So we wanted to revisit this trade after the pullback because we talked about shorting this market last week.  But of course, there are a few things that need to line up before we just start shorting the market.

The two principal things we look at most are:

1. High-probability seasonal analysis.
2. High-probability chart patterns.

We know that going into the rest of the year and early into next year that we should exhibit some negative price action due to years and years of seasonal data.

BUT – we need to wait for certain price patterns to appear.

Also, there is a lot of volatility right now in Natural Gas, which is not entirely out of the normal, but this level of price action is certainly out of the ordinary.

I’m not taking this one completely off my watchlist, but I will hold a more reserved stance and keep an eye on the near term developments.

If you are looking for a few different ways to trade this seasonal trade, you will have to watch the entire video above.

Happy Trading!

Silas Peters
Seasonal Swing Trader