Natural Gas Price Forecast August 1, 2017, Technical Analysis

Natural gas markets gapped lower at the open on Monday, always a very negative sign. As I write this, we are below the $2.85 level, and that suggests that we have broken support and are ready to go even lower. However, keep in mind that the gap is almost always needed to be filled once they appear, so a short-term rally could be a reality. However, I think that would be an excellent selling opportunity as we not only have the gap telling us how negative the market is, but we also have the longer-term downtrend. I believe that next we should be looking towards the $2.75 level underneath, and then eventually the $2.50 level below.

Selling rallies

The only trade that I have in this market is to sell rallies as they appear, and show signs of exhaustion which I think will be quite often. I have no interest in buying natural gas, because quite frankly we have more than enough supply of a natural gas to keep the market very negative. The summer has not been particularly hot in the United States, so that has heard some of the typical demand, and I believe that this is a market that is essentially “broken.” Given enough time, I believe that every time we rally, sellers will be willing to jump in based upon the ferocity of the negativity that we have seen in the market over the last several months.

NATGAS Video 01.8.17