[Editor’s note: Souhlakis relies on . For those readers seeking to learn more on that method, please see this week’s Feature story by James Dalton: The Market Profile Is a Time Machine. ]

NYMEX October natural gas futures have been in a contained within a $2.722/mmBtu to $2.889 balance bracket for the last twelve trading days. When a volatile market such as natural gas is contained to a relatively tight range for a period of time, a significant move usually follows when the market finally breaks from the balance bracket, seen on a Market Profile graphic.

OVERNIGHT ACTION
As of 8:15 a.m. ET, the majority of the overnight trading took place below settlement, making the majority of the overnight inventory short.

DOWNSIDE PUSH
On Monday, natural bas broke below and settled below the $2.722 balance bracket low. If the market remains below $2.722, we could see the downside move continue with an important reference of $2.515 within reach.

TODAY’S ACTION
Possible scenarios for today’s action include:
o Continue the break from balance to the downside and test the $2.515 reference.
o Gain acceptance back above $2.722 and begin a rotation to the $2.889 top of the balance bracket.

NYMEX Market Analysis

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