Natural Gas Markets Get Clobbered After Initial Spike

Perhaps I have a different perspective of natural gas as I live in Ohio, an area that is abundant with the natural resource. As a general rule, I tend to be very bearish and natural gas about 90% of the year. Which you have seen over the last week has been an attempt to run to $5.50 as there was a massive storm in the northeastern part of the United States, and therefore people start betting on short-term moves. The biggest problem is that natural gas is a relatively small market, so it can be kicked around quite a bit.

NATGAS Video 07.02.22

To my European and Asian friends: you have to keep in mind that this is all about the northeastern United States. Henry Hub Natural Gas is contracted is US centric, and probably will almost always be. You can see that we have formed a massive shooting star, it clearly bearish sign. In fact, that might be the last hurrah for natural gas this winter. I am now looking to short this on Monday and aiming for at least $3.50 below.

Quite frankly, we probably go lower than that, maybe aiming for the $3.00 level. I come up with this number because it is not only a bit of a magnet to price, but it is also the measured move of the descending triangle above that we broke out of and have now completely retested. In other words, I just do not have a bullish scenario for natural gas, as demand will start to fall off of a cliff now that spring is just around the corner.

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