Dec 1, 2015


After my last post the indexes fall a sleep... SP500 is in a narrow range for 7 trading days already so no change (see the previous post).

NATGAS is another commodity which everybody hate, but I think there is a huge potential for profits when we see long term bottom.
My previous analysis was pointing to an important low soon, but I was not following NATGAS closely. Now I have decided to look closely what is going on and I am posting my analysis because there is interesting observations. First cycles are pointing to important low like other commodities/precious metals even the same time frame for the low and second interesting findings if you use cycles.

The big picture - at first glance the cycles look random there is 3/4/5/6/8 year cycles and there is no enough data. It is confusing, but the solution came from the DAX. I had similar problem with the DAX, SP500 looks almost perfect roughly 7 and 14 year cycles, but the DAX - the current cycle looks like 7 year cycle the previous one was 6 years long the one before that 8 years.... obviously there is some cycles, but they look random. So I have decided to search for long term chart and I have found one starting in 1959. The cycles are again 6/7/8 years long and look random BUT if you make one step back and look at the bigger cycle you have perfect 14 year cycle like SP500 and within there is alternation 8+6 and 7+7 years. Since 1959 the cycle for the DAX are 7 | 8+6 | 7+7 | 8+6 | 7 running. It is astonishing 14 year cycle like a clock and it alternates 8+6 followed by 7+7. Now it does not look random at all. It is not a surprise that the current one will be with high probability 7 years long.

Now with this information NATGAS has the same long term 14 year cycle like SP500/DAX, but it is 8+6 years like the DAX and this explains the shorter cycles 3/6 years. We are close to major low 18 year nominal cycle which is 14 years long. Expect at least mean reversion to around 5.

Closer look of the 4 year/18 month/20 week nominal cycles shows that we need one more 20 week cycle(running at week 6 at the moment).
The low for the current 20 week cycle should be the low for the 18 month/4 year/9 year/ 18 year nominal cycles(14 years long as I explained above).

Even closer look says we need one more 40 day cycle to finish the current 20 week cycle.

And elliot waves says we should be in final wave 5 of C which confirms what cycles say.

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