Natural Gas Price Forecast February 6, 2018, Technical Analysis

Natural gas markets went sideways initially on Monday, but as the Americans came on board, they started to push the market lower. We finally broke down below the $3.00 level, which of course has a certain amount of psychological importance attached to it. I believe at this point any rally is a selling opportunity, and that the “ceiling” in the market, Lee short-term, has moved down to the $3.10 level. Signs of exhaustion after short-term rallies should be a nice selling opportunity, and I think that the sellers will continue to punish this market as we are exiting the coldest part of the year in the futures markets for the United States.

The market should continue to go negative at this point, and I think that selling the rallies will be the only way to trade this market. However, we are getting a bit overstretched, so the rallies will appear sooner rather than later. I think that the market will target the $2.75 level, and then perhaps even lower than that. I have no interest in buying the natural gas markets, at least not until we would clear the $3.30 level with extreme volume, and I think that the market will eventually continue to find reasons to fall. As the ground thaws in the United States, there will be more drilling, and of course fracking. Because of this, supply is about to explode to the upside, causing bearish pressure as per usual.

NATGAS Video 06.02.18