TTF, War, and Gaps…
Since the Iran War started, we have seen Energy markets (all markets, to be fair!) responding on a minute-by-minute basis to headlines and news from the Middle East and quite often this news (most often Truth social posts by Trump) has come overnight or over the weekend.
Monday mornings have often started with gaps appearing in Oil, Gas and Power markets.
“A price gap is created when a market opens above the previous sessions’ high or below the previous session’s low.“
What’s been interesting in TTF, in particular, is that in the main these have been responded to with opposite trade.
“The general ‘rule of thumb’ is that a gap up in an uptrend creates a support level and if it holds we can keep going higher, and vice versa for bear markets that gap down. This can work extremely well in firmly trending markets and has served Gas traders very well in recent years.“
But what we’ve been seeing is markets gapping higher, then selling off and filling those gaps within a day or so. In fact, the number of red candles on the TTF chart since this all started is frankly quite astounding (as was pointed out by a client I was on a call with the other day).
Since March 2nd we have set a range of 37.96 to 74.00 for the TTF front month but in that time, we have only posted 9 green candles (2 of which were basically Doji More) out of 30 sessions. Obviously, the red candles that have appeared since the “ceasefire” was announced make a bit more sense in context, but still, it’s quite a stat!
Here is a chart showcasing this:
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Clive Lambert FSTA – FuturesTechs
25 years of institutional expertise in the UK and European Energy Markets and 10-time Technical Analysis award winner. Clive provides industry-standard technical outlook, utilising Market Profile and Candlesticks Analysis for over 100 global trading desks.
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