Natural Gas Continues to Show Resistance

I cannot believe how many times I have say this, but the Henry Hub Natural Gas contract is a US contract. That does not mean that the United States cannot export natural gas in the form of LNG, but it is not enough at the moment to replace what is going on in Europe. This knee-jerk reaction to what is going on in the Ukraine region is foolish, and professional traders come in and squashes type of nonsense. We have formed a shooting star, and that does of course suggests that we are going lower. With this being the case, the market could very well go looking towards the 50 day EMA, and then possibly the 200 day EMA.

NATGAS Video 23.02.22

Even if we do break above the top of the shooting star, unless it has announced that the United States is suddenly going to become the main exporter to the European Union for LNG, I just do not see how this holds on. Most of the LNG that has been leading the US has been heading towards Asia until recently, and there are a lot of contracts to still work through. Because of this, the market is likely to see a lot of noisy behavior, but I like the idea of fading these rallies. That it has been the way have been playing natural gas over the last couple of weeks, simply shorting it every time it gets to be a bit too expensive. We are still in a downtrend and could perhaps be building a massive head and shoulders, although it is far too early to call that.

The one thing that does help natural gas is that commodities in general are rising, but quite frankly natural gas is one of the few commodities that supplied can almost always take care of demand.

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