Natural Gas Markets Find Resistance at the Big Number

Natural gas markets have shot higher during the trading session on Monday but gave back the gains as we continue to see a lot of selling pressure just above the $5.00 level. Because of this, I think the market will eventually have to come to grips with the fact that demand simply is not going to be there, despite all of the noise coming out of the European Union. The reality is that the Americans do not export enough LNG to make it effective.

NATGAS Video 08.03.22

Furthermore, spring is coming in the United States and therefore the demand for natural gas will drop precipitously. Because of this, I do anticipate that this market will continue to drop there is a lot of noise out there not only due to the Russians but also because commodities, in general, have been spiking. In that scenario, we will get the occasional significant bounce. However, that bounce will continue to be an opportunity to sell this commodity, which is exactly what I did first thing this morning.

Underneath, I believe that the contract may be looking towards the $4.50 level for the next support level, the least of rather significant importance. Breaking down below that opens up the possibility of reaching towards the 200 Day EMA, currently sitting at $4.17.

If we do break above the top of the candlestick for the trading session on Monday, then the next major support barrier to contend with will be the $5.50 level. That is an area that I think will probably attract a lot of attention as it did last time. In fact, I believe there is a roughly $0.50 barrier just above.

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