Recently, I have noticed that the $2.82 level has offered enough resistance to roll the market back to the downside, and I think that we will continue to see sellers jumping into this market occasionally. The $2.70 level underneath should be targeted, and then eventually the $2.60 level as it is a massive amount of support. I believe that massive amount of support extends down to the $2.50 level, which is the absolute bottom of longer-term consolidation. Remember, natural gas markets are highly sensitive to the short-term demand for energy in the United States and Canada, and with temperatures rising, it’s very possible that demand will drop drastically. We certainly have enough supply longer term, so I think that ultimately it’s easier to short this market than buy it.
If we were to break above the $2.82 level, then I think the market could go to the $2.90 level above, perhaps the $3.00 level. The market continues to find reasons to fall, but if we did break above that resistance barrier, I think it could be a short-term opportunity for those who are buyers, and I think that the futures market would make an excellent opportunity on the break out. However, over the last couple of days we have seen just how hard it would be for that to happen. I like shorting exhaustive candles as they appear, and I think that longer-term we will certainly see selling workout much easier.