Natural gas markets should continue to be very noisy as is typical, and to me it looks as if we are going to go looking towards the $2.80 level underneath. Rallies at this point will probably be selling opportunities, but I think that a bounce from the $2.80 level could be a bit more significant. If we break down below the uptrend line that I have drawn on the chart, which is roughly near the $2.78 level, then I think it’s only a matter time before you even lower.
The $3.00 level above is massive resistance, and I think at this point it’s going to be very difficult to break out above that level. I think that the market continues to find a lot of volatility based upon weather reports coming out of the United States, and I think that will continue to be the case. Keep your position size small and assume that we are going to continue to see a lot of back-and-forth action. Because of this, I am starting to look at this market as consolidating between the $2.80 level on the bottom and the $3.00 level at the top. Expect volatility, but that’s nothing new if you have been trading natural gas recently. I would suggest the CFD market, because you can keep your position size small enough to keep yourself out of major trouble. I think that it’s only a matter time before we get some type of clarity, but in the meantime play the market safely.