Natural gas falls again on Tuesday

Natural gas markets went sideways initially during the trading session on Tuesday, reaching down to the $2.65 level. That’s an area that has been supportive more than once, and it looks likely that the area just below should be massively supportive, extending down to the $2.60 level. This massive support level should continue to be important, but if we were to break down below the $2.60 level, the next major support level under there is the $2.50 level. If we were to somehow break down below there, the market could unwind rather drastically.

Any rally that we get continues to be a selling opportunity. I think that at the first signs of exhaustion, especially near the $2.70 level in the short term, should be an opportunity to start selling. If we break above there, I think there is more than enough resistance near the $2.75 level and the $2.80 level. I believe that this market continues to be very noisy, but I believe that this range bound situation gives us an opportunity to short the market repeatedly. I would do so in small positions, but it has been reliably negative. The higher we go, the more aggressive I get to the downside on signs of exhaustion. I expect volatility in this market, but that’s nothing new as natural gas markets tend to be a bit thinner than some of the other futures contracts. With the oversupply of natural gas, it’s a most impossible to imagine a bullish situation.

NATGAS Video 11.04.18