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Christopher Lewis

Natural gas markets have broken down a bit during the trading session on Friday, showing signs of weakness yet again. Ultimately this is a market that is probably going to go looking towards the lows again, and maybe even drop down to the $1.60 handle. Rallies at this point should be a nice selling opportunity, as they have been for months. The 50 day EMA has broken below the $2.00 level, an area that I considered to be the “ceiling” in the market.

NATGAS Video 09.03.20

At this juncture, the market is very likely to continue to favor the shorter-term trader, as this market tends to move on the latest weather report. That being said though whether is going to be getting warmer in the United States just as the oversupply continues to be an issue. And it isn’t going away anytime soon. This is the wrong time of year for natural gas to try to rally, so at this point every time it rallies you should be selling. In fact, the market is one that continues to show signs of exhaustion any time it does try to rally, but I think eventually we will get some type of wave of bankruptcies in the United States that could lift this market. That being said, that is a longer-term process so it’s going to take a while for that to happen. Natural gas looks very likely to continue to offer plenty of short-term trading opportunities but longer-term there isn’t much to do. Ultimately, this is a market that has a ton of pressure above it.

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