European Energy Markets:
The bulls are not in charge yet
In short: TTF, NBP, German Power pushed higher but the bulls are not in charge
TTF, NBP and German Power have strengthened again after their shallow corrections found support around the previously anticipated 38.2% Fib retracement. But it is uncertain if this will translate into a full bullish recovery. A volatile drift sideways may be in the cards.
The Clever Markets Regime Index shows that the markets are still non-trending. This means that price swings tend to be shorter than in a trending market.
Our proprietary trend-maturity algorithm shows that the bearish reversal risk is gradually building. More importantly, stronger trend maturity states on our algos are not translating into equally strong price gains. German Power, for example, has risen by hardly 4% despite reaching a very strong trend maturity state. This usually highlights growing bullish exhaustion risk.
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Brent remains stuck sideways with persistently weak and uncertain trend maturity states. Spec plays are best avoided, although a slight bullish bias remains appropriate given the market’s sensitivity to upside catalysts.
Henry Hub has fallen sharply following our previous bearish call and has now returned into a neutral Regime Index. With directional conviction fading, spec plays are best avoided for now.
EUA is the key market to watch. Prices settled below the rising channel last Friday and are now threatening a broader channel breakdown, which could trigger further long liquidation. Here at Clever Markets, all eyes are on the trend maturity tool starting to signal a robust bearish trend that would strengthen the case for a sharper bearish reversal.
TTF Sentiment Benchmark
The sentiment benchmark showed five consecutive weeks of bullish dominance that was interrupted last week with a balanced sentiment. This week, the bulls are back in charge.
But our proprietary tools show that the underlying bullish structure is less firm than some market participants may expect.