Oct Natural Gas Deflating - Update 6

 

This morning at 10:30am ET the EIA Nat Gas Storage Report was scheduled to come out. I tightened our Stop Loss to 2.450 in case we got a big bullish surprise. At 9:17 I lowered it further down to 2.410, which is just over today's high. 

At 13:00 ET I raised our target to 2.250. This is more centered in the group of possible support levels that could be the reversal point. Stochastics are oversold now and we don't want to miss our exit right before a fast bounce back up. The 2.225 was a good initial target and it may will get hit, or price could continue significantly further down. But now that we're near, we can see where the support levels are:

• The AB/CD projection (thick yellow angled line segments) suggest about 2.277.
• The Head and Shoulders projection (purple thick vertical line segment) suggests about 2.250.
• The 50 SMA (curvy thick red line) suggests about 2.245.
• The previous swing low on 8/12/20 is 2.228.
• The 50% Fib retracement of the green range is 2.222.
• The 61.8% Fib extension of the yellow range is 2.212.
• The 200sma (very long wavy horizontal thick white line) is 2.182.

We are trying to get as much profit as possible. If we set our target too low then we have to chase the reversal. If we set it too high we miss out on additional price movement in our favor. Picking the exact bottom before it is established is nearly impossible, although I have done it many times, but I wouldn't argue if you said those occasions probably had some element of luck. Where the luck isn't in my determination of the target, but rather that the market respected the support level I picked and with high precision.

My plan is to use the 2.250 target, then if its approached after I can get to my computer in the morning, I'll go down to the 10 minute or maybe even the 3 minute and micromanage the exit the best I can.

2.250 isn't the highest target but it is near the top of the target set. My temptation is to use the highest target to minimize the chance of missing the reversal. Of course, price could reverse before hitting any of these targets. 

The nightmare is that prices drift up overnight and hit our 2.410 Stop. Its up to the Trading Gods now.