• 4 hours Gold Miners Eye Further Upside
  • 10 hours Alibaba Exec Sets Record With $3.5 Billion Brooklyn Nets Purchase
  • 1 day Smart Contracts: The Tech Reshaping Entire Industries
  • 1 day Protests Threaten $5 Billion Peruvian Copper Mine
  • 2 days Why Wealthy Kids Are Getting Into College For Free
  • 2 days Is Is Too Late To Get Into The New Gold Boom?
  • 2 days Solar Tech Breakthroughs Spark Surge In Adoption
  • 3 days These Rare Stones Are About To Become Priceless
  • 3 days Why Silver Miners Aren’t Living Up To Expectations
  • 3 days WeWork Reveals Huge Losses Ahead Of IPO
  • 4 days American Education Continues To Fall Behind China
  • 4 days EV Sector Needs 250% More Of This Metal By 2030 Just For Charging Stations
  • 4 days Why Gold Prices Are About To Skyrocket Even Higher
  • 5 days Scientists Create The World’s First 2D Gold
  • 5 days The Key To Commercial Fusion
  • 5 days Inflation Is Creeping Up In Consumer Goods
  • 6 days U.S. Healthcare Industry Could Be Decimated By The Trade War
  • 6 days Washington's $400 Billion Emissions Plan
  • 7 days The Trade War Shows No Sign Of Easing
  • 7 days Bearish News Could Lead To A Bloodbath In The Third Quarter
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

  1. Home
  2. Markets
  3. Other

Natural Gas and the Influence of La Nina

Technical observations of RossClark@shaw.ca

Look for a high in gas prices soon, a correction and then a rally into the summer of 2017.


Oceanic Niño Index

Oceanic Nini Index
http://ggweather.com/enso/oni.htm


Histograms identify October of moderate La Niña's

Natural Gas Futures Monthly Chart 1996-2016

The tropical Pacific Ocean goes through natural warming (El Niño) and cooling (La Niña) cycles. Last winter was categorized as a 'very strong' El Niño comparable to those of 1972/73, 1982/83 and 1997/98. Subsequent years see moderate La Niña's. This year is experiencing such a cooling trend.

Natural gas futures contracts have a limited trading history, dating back to 1995. When we view the relationship between them and the La Niña Years we find a correlation. Natural gas tends to be strong for seven to ten weeks in September/October and rollover in November (2010 initially peaked at 7 and then extended to 13 weeks). The current rally has finished its ninth week. The weekly RSI(14) normally topped in the 60's. It is now 68. Watch for a high soon and then a downside break of 20% or more.

Once a break of six or more weeks has run its course, we could look forward to the possibility of a rally lasting into the summer of 2017.

2016
Natural Gas Futures 2016 Daily Chart

October Tops

1998/99
Natural Gas Futures 1998/1999 Daily Chart
1999/2000
Natural Gas Futures 1999/2000 Daily Chart
2007/2008
Natural Gas Futures 2007/2008 Daily Chart
2010/2011
Natural Gas Futures 2010/2011 Daily Chart

 

Energy stocks that can be monitored for purchases on a deep correction:

In the US; Pioneer (PXD), Apache (APA) and WPX Energy (WPX). In Canada; Crew (CR), Seven Gen (VII), Encana (ECA), Advantage (AAV), Paramount (POU), Painted Pony (PPY), Bonavista (BNP), Peyto (PEY), Birchcliff (BIR), Tourmaline (TOU) and Enerflex (EFX).

 

Back to homepage

Leave a comment

Leave a comment