NATURAL GAS: THE DILEMMA
Here is Natural Gas in somewhat of a pickle with both Buy and Sell indications, which way to go?
There is not a perfect answer for situations like this. In this instance I am leaning to the long side, here is why. First we are seeing some commercial buying as we moved down to test the low of the last few years. This tells us the big boys are trying to defend this price level. This is also occurring at a time when the Seasonal low is typically made. We do have Sentiment being a bit too bullish but you can't always have everything. The bullish sentiment is what is generating the sell signals.
Since I typically enter trades off Daily charts this dilemma is not a big problem. I need to have a signal on a daily chart to support what I think the big picture setup is. In a case like this I will take the signals in both directions but I will look to try and catch a bigger move to the up side here. I think too many people get overly critical of people who call out setups saying they were wrong etc.. A setup is just that a SETUP. It is not an entry signal. If means that the conditions are right for a move to take place. This does not mean you blindly buy or sell at the market.
In this case I feel the preponderance of the evidence suggests a rally but that does not mean I will not short this market. It does mean I am looking for buy signals first. I have neither buy or sell daily signals for tomorrow, so nothing to do here other than point out this market as once that is SETUP.
The overall market continues to stay strong and until proven otherwise the trend is decidedly up.
Have a nice weekend