Natural Gas Price Analysis – Natural Gas Crashes at the Open

Natural Gas Technical Analysis

Natural gas is at it again; it gapped lower to kick off the trading week and it’s just sitting here at the $3 level. This is a dead market, and quite frankly, you can’t short it all the way down here, so the question then becomes, what do you do with it?

I think typically we get some type of cold weather this time of year that will cause a spike. But my anticipation is that the spike probably won’t have the power that a lot of people are looking for. Until the last couple of days, I was looking for a bounce towards $4.50 and perhaps trying to take advantage of it.

April Contract Rollover Expectations

I suspect that the window has passed because here on the 25th, we are going to roll over into the April contract. Remember, futures markets can be influenced by what’s going on now, but by April, natural gas consumption will be through the floor in the United States.

What I’m hoping for here is some type of impulsive move to the upside that I can start selling. I don’t have any interest in buying it anymore. I think we’ve turned that corner finally, and with that being said, and the fact that it’s here in the states in the mid-50s, so that would be basically 12 degrees centigrade, so not overly blistering cold, and therefore I think a lot of the demand’s probably just not going to pick up in time to really wear down supply.

This is a “fade the rally” market. I would not short it down here, there should be a significant amount of support.

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