Natural Gas Markets Show a Pop

Natural gas markets have rallied significantly during the course of the trading session on Friday to reach towards the $4.85 level again. That being said, this is an area that saw a lot of selling previously, and we have pulled back from there. Because of this, I do think that we have sellers coming back into the marketplace, perhaps pushing this thing back towards the 50 day EMA. The $5.00 level above is a major barrier that I think will not be broken. Even if it is, any signs of exhaustion I will be all over right away.

NATGAS Video 31.01.22

Ultimately, this is a market that continues to be very noisy, and range bound but in a wild range. That is probably true with most markets, with the $3.50 level underneath being support. That is an area that will be tough to break down through, but I think it is only a matter of time before that happens. The three-pointer zero dollars level is the target based upon the “measured move” from the descending triangle above. With this being the case, I think the market is probably going to continue to look towards that area longer term, and as temperatures rise again in America, the selling will be ferocious.

The $3.00 level is an area that has been like a magnet for price for quite some time, and therefore it is not a huge surprise if we get back down to that area. Quite frankly, I think it is only a matter of time so I am selectively shorting this market and try to keep my position size reasonable due to the fact that it is so volatile under the best of conditions.

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