European Energy Markets:
Waiting for that trigger
In short: TTF / NBP / German power start the week in a tight range. A move below their respective 23.6% Fib retracements would trigger the bears. Else, the bulls will continue above the most recent peaks.
Statistical probabilities for a top forming have been high for some time now… only for European gas and power markets to push higher once more. This highlights the importance of a robust methodology and sensible risk management.
Because even with a high-likelihood bearish setup, we still need to wait for a trigger. We also need to establish when this bearish assessment is invalidated. This is where entries and stop losses come in.
The TTF front month is once again reaching a bullish exhaustion territory as per our algos. But our regime index is still signaling a strong, although cooling, trend.
In alignment with the Clever Markets methodology, we now need to wait for a bearish trigger. That’s the 23.6% Fib retracement at €69.70/MWh. Price could then make it to €60.64/MWh. Even with a corrective move lower, eventual upside continuation seems most probable.
Else, the bulls will be reaffirmed sooner with a push above €76.12/MWh.
We now need to sit on our hands and wait for this €69.70 – 76.12/MWh range to resolve. Either way is fine. No ego. Not trying to outsmart the market. Just trading in alignment with it and not trying to white-knuckle through a bad trade hoping the market will turn.
No predictions, just probabilities. Sounds boring, but is effective.
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TTF Sentiment Benchmark
The bullish sentiment is dominating for a third consecutive week.
Although a bullish bias is also maintained from our side in the absence of a clear bearish trigger, there is an increasingly higher statistical probability for the market to top out.
But we need to wait for that trigger (see our dashboard for details).