Natural gas markets initially tried to rally during the day on Tuesday, but then fell significantly as the Americans stepped on board. However, we turned around a little bit later, to show signs of strength again. I think we are currently consolidating more than anything else and I think that a break higher could be possible, but it will be short-lived. The $2.85 level above should continue to show signs of resistance, and even if we break above there, we have a significant gap from several sessions ago that should continue to be a bit of a lid in this market. I think that an exhaustive candle is exactly what we are looking for to start shorting, but we don’t quite have it yet. The higher we go, the more likely I am to sell this market.
Breaking 2.75
The I believe that eventually we will break down below the $2.75 level, and then go looking to the $2.50 level longer term. I think that there is a lot of work to be done to chip away at that support level, servers and we rally I think that sellers will continue to jump into this market as we build up momentum. I have no interest in buying this market, it simply a matter of waiting for the sellers to return so that I can get involved. Ultimately, we are still oversupplied with natural gas, and that should continue to be the case in the foreseeable future. Once we break down below the $2.75 level, I would have a core short position, and supplemented from time to time on short-term rallies in order to maximize profits as we will almost undoubtedly have significant amounts of volatility underneath the $2.75 level and below as it would be a significant break down.