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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (9902)	9/4/2008 10:31:16 PM
From: John Pitera	Read Replies (1) \| Respond to of 33421

NG forecast Natural Gas is bottoming here. That goes against the trend following wisdom, but it's setting up a great momentum divergence bottom. Art Cashin of UBS is going to be right that this absence of Sunspots is going to translate into an unusually cold winter, and the energy complex is getting overdone on the short side. That's my opinion. I don't see Natural Gas going to 5.50 or 5.00 from here. On a momentum basis, on a daily chart it has created a 4 momentum divergence RSI buy signal here which is mirrored precisely by the 4 daily momentum divergence that it created when it topped at 13.80 on July 2nd of this year. I'd say that the market is giving it away and it's a big time buy here. UNG is the ETF and looking at the chart of the ETF, I believe it's showing a powerful buying opportunity today at when it staged the false breakdown to 32.30...a dollar below the Sept and Dec 2007 lows at 33.23 and 33.58. That is the classic example of a false market technical break, and is not supported by the action in the underlying spot market. Heck, put a long trade on with a stop below 32.30 for a 4 to 1 or better risk reward ratio trade. John ----- and yes I was early and wrong looking for its low several weeks ago. at the time it was too much bravado, as we really did not have any type of proper momentum divergence buying opportunity created on any of the daily ROC, RSI's and MACD's. Now we do. In spades. JP edit-- when we see the end of summer seasonal low, the seasonal trend goes up strongly into Dec. Thus it's a trade you can put on and you know to harvest it in Dec. Lock it in by getting really aggressive with a tight trailing stop loss after thanksgiving. John