Natural gas markets went back and forth again during the trading session on Wednesday, as we continue to struggle for directionality. The market of course is in the seasonally bullish time of year, but quite frankly with a warmer than anticipated fall, and possibly even winter, this is a recipe for selling pressure. The $3.20 level underneath is support, but if we break down below there the market probably goes down to the $3.10 level. Above here, there is a significant amount of resistance at the $3.40 level, and I don’t think we break above there. I like selling short-term rallies on signs of exhaustion, but at this point it’s likely that there will be buyers based upon seasonality as well.
NATGAS Midday Video 31.10.18
Short term, I believe that the $3.25 level is a bit of a fulcrum for “fair price”, so keep that in mind. I think that the market also is very erratic so I would do so with small positions if I had to be involved. If we break down below the $3.20 level, the $3.10 level should be rather supportive, but a break down below there opens up the trap door to much lower pricing. If that happens, it probably has to do with the warmer temperatures, and a reentry into the previous consolidation that we have seen for some time. I don’t like buying overall this point, because we had rallied so stringently before this consolidation move.