European Energy Markets:
Runaway Market
TTF, NBP and German Power are seeing extreme bull trends amidst the strongly trending regime states per our in-house algos. For the first time in weeks, we are now getting ready for a corrective move lower but we must wait for a clear trigger before acting.
We have been living through a ‘runaway market’, a strong price surge with little to no traditional pullback opportunities. This effectively locked out traders waiting on the sidelines for an optimised long entry in the pullbacks.
According to our algos, it would take a significant amount of price action and volume to further accelerate momentum.
To be clear – we are saying that an even steeper uptrend would be unlikely. We are not saying that further upside is unlikely.
Trailing stoploss levels are best tightened for bullish traders to ride the continuous trend while limiting downside risks. The recent price action continues to highlight the key principle of our methodology, where trends have a higher likelihood of extension under a trending regime.
- Speculative traders: The bull trend may continue further in a trending regime but watch out for a likely bearish correction as prices reach peak bullish exhaustion zone.
- Physical Buyers: Physical buyers may scan lower-level charts for minor corrective moves to get a price that is marginally better amidst the persistent uptrend.
Brent still has room for further upside under a trending regime.
EUA is seeing a bearish correction playing out as anticipated previously.
Henry hub continues to see a likely bullish reversal still consolidating.
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TTF Sentiment Benchmark
The bulls remain in charge on our sentiment benchmark for another week. But bullish dominance is slowly chipping away with a loss of nine percentage points week-on-week. The gradual shift towards balance doesn’t necessarily signal a reversal. It rather encourages a gradual increase instead of further spikes.