Introduction
Natural Gas is one of the most misunderstood markets in technical analysis.
Applying equity-style trend expectations to NG often leads to incorrect conclusions.
A review of over a century of Natural Gas futures data reveals a consistent structural truth:
Natural Gas spends most of its life in compression and basing, followed by short-lived but violent expansions.
Understanding this behavior is essential for correct Elliott Wave interpretation.
1️⃣ Natural Gas Market Personality
Unlike equities, Natural Gas behaves very differently:
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Mean-reverting by nature
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Supply–demand shocks create vertical spikes
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Corrections frequently retrace 70–90% of prior advances
These characteristics naturally produce:
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Deep Wave-2 corrections
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Complex Wave-B structures
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Extended sideways phases
👉 This is normal behavior, not weakness.
2️⃣ Historical Structure Overview
The historical chart shows repeating cycles of:
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Long accumulation / base formation
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Explosive upside expansions
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Deep, prolonged corrective phases
Importantly, the corrective phases:
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Are overlapping
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Lack impulsive downside momentum
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Consume more time than price
This directly explains why NG corrections feel “messy” yet remain structurally valid.
3️⃣ Where We Are Now (Structural Context)
The 2020–2022 rally qualifies as a major impulsive expansion.
The decline from the 2022 peak has so far displayed:
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Overlapping price action
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Lack of sustained downside acceleration
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Stabilisation near long-term equilibrium levels
This behavior aligns best with a Wave-2 or Wave-B correction, not a new secular downtrend.
🔍 Structure Check (Current)
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No impulsive bearish sequence is visible
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Price is building inside a long-term base zone
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Structure remains corrective, not trend-breaking
👉 No confirmation yet of a bearish Wave-3 down.
📊 RSI & Momentum Check (Long-Term)
On long-term charts:
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RSI rarely stays oversold for extended periods
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Momentum stabilisation often precedes large moves
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Divergences matter only near structural extremes
Current RSI behavior shows:
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Holding in the 40–45 zone
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Higher lows forming
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No bearish momentum expansion
👉 This supports a corrective reset, not continuation weakness.
📦 Key Levels (Very Important)
🟢 Major Demand / Structure Hold Zone
2.60 – 3.05
As long as price holds above this zone, the basing structure remains intact.
🟡 Acceptance / Bias Shift Zone
3.30 – 3.40
Sustained acceptance above this range would signal upside expansion potential.
🔴 Invalidation (Re-evaluation Needed)
Sustained weekly acceptance below ~2.50
→ Structure becomes extended and requires reassessment.
🎯 What to Expect Next
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Continued range development is possible
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Volatility compression before directional release
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NG historically does not drift into trends — it releases suddenly
Patience during basing phases is essential.
🧠 How to Act in the Current Scenario
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Avoid prediction inside the range
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Respect structure and key levels
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React only on acceptance or rejection, not emotion
Structure first. Reaction second. Prediction last.
Conclusion
The historical Natural Gas futures chart strongly supports the view that:
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Deep, prolonged corrections are normal
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Current price action fits a late corrective / basing phase
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Large moves typically follow extended boredom, not excitement
Elliott Wave is not about prediction — it is about understanding structure.
🔒 Disclaimer
This analysis is for educational and informational purposes only and does not constitute investment advice.
#NaturalGas #NG #XNGUSD
#MarketStructure #ElliottWave
#Commodities #Wave2
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