The Buffalo Trader

To read the previous discusson on UNG, click here.It appears that we may indeed break the symmetrical triangle pattern to the downside, but lets look at the chart first.

Before I begin this discussion, I am in no way putting down anyone who uses Elliot Wave Theory as a technical benchmark with which to trade. Anyone who has read Jack Schwager's Market Wizards and New Market Wizards knows that there are at least 38 (in fact, there are infinite numbers) ways to trade markets profitably. I am simply presenting the methodology that I use and the evidence that validates it.

I will try to keep this post to a minimum. This post is not designed to criticize other traders/investors strategies or outlooks. I base virtually everything I write about on personal experience. My experience, though not perfect, has landed me in a pretty good place. The reason I think it has is that I try to apply common sense, good analysis, and when necessary, technology to investments and trade opportunities of all kinds.

Most of the economic news, particularly in the US, points to low or almost now inflation in the short run, even though the yield curve is jumping at the long end and threatens to spill into the intermediate and short end.

UNG is, as most of you know, the United States Natural Gas Fund, LP. It is an exchange traded fund (ETF) designed to track the natural gas futures prices of gas delivered at Henry Hub, LA. Because of the glut of natural gas, prices over the last year, have virtually collapsed.

As I think I tweeted a few times at the beginning of last week, large investors, institutional or otherwise, seem to be pushing certain healthcare, healthcare infrastructure (physician practise services, prescription services (like MDRX), biotechs, and small generic pharmaceutical companies. 

A lot of things have hit my plate since mid-May, and now some friends of mine will likely require a little assistance because this economy has hit them in the stomach. For that reason, I am going to spend all my time, with a few exceptions of posting trades in this blog (of past trades this week), trying to finish upgrading this network.

This past week I have been forced through some unexpected timeliness and confluence of events to have to make some investing decisions. Those investing decisions are divided both in time and in capital.Before making decisions, I decided to view the entire investment landscape in stocks, bonds, hard assets, real estate, raw land, and a few others.

As GLD seems to be correcting from the current rally, it seems that the operator of the Chicago Mercantile Exchange, CME Group (symbol CME), may also be running out of gas for this rally. The pattern that shows up on a weekly basis is roughly a Bearish Gartley Pattern.

GLD is at a crossroad (as perhaps is the price of gold).  The best way to observe the price action is from the weekly perspective. I have built two charts (one with Ensign to show retracements and one with E-Signal).