Natural Gas Price December 4, 2017, Technical Analysis

Natural gas markets continue to be very dangerous, as we initially tried to rally during the day on Friday, but rolled over again. In fact, on the hourly chart it almost looks as if we are trying to form some type of bearish flag, and that makes sense considering that it would send the market down to the $2.93 level which would fill the gap. Ultimately, it would also signify that we could go down to the $2.5 level, which would be more of a continuation than anything else as this market has bounced around quite violently over the last several weeks. The biggest problem is of course that we are trading on weather forecasts for the following week coming out of the northeastern part of the United States. Longer-term demand is all but a thing of the past, because we already know that natural gas markets are oversupplied. At this point, a breakdown below the $3.00 level sends this market down to the $2.95 level, and then eventually filling the bottom of the consolidation at the $2.85 level. If we were to break above the $3.10 level, then I think the market will probably go back to the $3.20 level after that and a further amount of consolidation and noisy trading. Natural gas is a bit thin, with seasonality coming into play, perhaps trying to push the value of natural gas higher while simultaneously a massive oversupply of natural gas works against it. This continues to be very noisy and very dangerous trading conditions, so please use a small trade size.

NATGAS Video 04.12.17