Natural Gas Forecast November 2, 2017, Technical Analysis

The natural gas markets went sideways initially during the day on Wednesday, but then rolled over to test the $2.85 level underneath, which has been the bottom of the overall consolidation that we have been around for months. I think that the market should continue to be one that chops around back and forth, and I think that the short-term traders will continue to look at this as a range bound market that they can take advantage of. I know I certainly do, and I also look at any rally at this point as an opportunity to step aside, and then start selling closer to the $3.00 level again, as we have seen such resiliency in the selling pressure, and more importantly the mass of oversupply that the Americans bring online at that level.

Short-term traders will be willing to take a long signal in this area, but I’m a bit more conservative than that, I wait for an opportunity to start selling above. If you are a bit more adventurous, then you may look for some type of opportunity to go long, but quite frankly it’s very likely that the volatility will only increase, not abate. The temperatures are getting cooler in the United States, but not cold enough to wipe out the massive oversupply. If we were to break down below the $2.85 level, the market then goes down to the $2.75 level. I have no interest in going long of this market from a longer-term standpoint, and look at any buying opportunity as a simple short-term opportunity in the noise of the natural gas markets. Position sizing could be an issue, but quite frankly we have seen enough selling pressure above at the $3.00 level that I have been comfortable trading futures positions.

NATGAS Video 02.11.17