Aug 162012

NG 09 12 (1 Min) 08.16.12

8/16/2012 Weekly Natural Gas Inventory Report (0430 HI time / 1030 EDT)
Forecast: 25B
Actual: 20B
Started @ 2.735
1st Peak @ 2.840 – 0431 (1 min)
105 ticks

Reversal to 2.685 – 0438 (8 min)
155 ticks

Notes: Smaller than expected gain in supply from the forecast caused a large long spike on the :31 bar. The bulls could not sustain the gains, leaving 50 ticks on the wick naked. With JOBB, after 20-30 ticks of slippage, you would still have an opportunity for 40-50 ticks of profit. The market did short about 35 ticks on the :30 bar, but this was early in the candle and would not have filled your order short. The spike crossed all 3 major SMAs and the PP/R1 Pivots in its ascent. 2.840 had been an area of resistance 2 days earlier, which served to cap the peak. The reversal gained 1.5x the peak in only 7 min to eclipse the S2 Pivot. If you did not trade the initial spike, a short trade at the 2.784 area would be wise after seeing resistance in that area on the :31 – :34 bars, then close out at the area of the S1 Pivot since the :30 bar saw support there. After the :38 bar eclipsed the S2 Pivot, a long entry would be wise to ride up to the 50 SMA.