Natural gas markets went back and forth during the course of the week, forming a bit of a neutral hammer. I think that the market breaking above the previous channel suggested a very strong proclivity to the upside, but during this past week we break down through that level, only to turn right back around. In other words, this is a market that continues to go back and forth and try to decide where to go next. The $3.00 level above is resistance that extends towards the $3.10 level above. I anticipate that the market participants will try that area, and I think it’s going to be interesting to see whether we can continue the upward momentum. I think in the short term, we probably will but it’s obvious that there is a lot of noise above.
There is a lot of this market, so keep in mind that we will continue to struggle to find some type of longer-term directionality. I think that the market is simply continuing to go back and forth in the overall consolidation, and we are much closer to the highs that we are the lows. I think that some type of exhaustion will probably show itself rather soon, and at that point I think that the sellers will come back to try to push towards the $2.60 level. At this point, it’s very difficult to trade this from a longer-term standpoint as it tends to be focused on the next couple of days.