Natural gas markets have gone back and forth during the trading session on Monday, as we have gone back and forth yet again. This is a market that continues to see a lot of negativity though, and I believe that the $1.80 level should offer a significant amount of resistance. Even if we did break above there, then the 50 day EMA above would be an area that I would be looking for selling pressure as well. Furthermore, the $2.00 level will offer a lot of resistance. All things being equal, it’s difficult to imagine a scenario where the market turns around anytime soon, but the credit markets could be the vehicle.
NATGAS Video 10.03.20
The markets have been oversold for quite some time, but until we get a scenario where drillers and suppliers go out of business, it’s going to be difficult to see the market chew through the supply. Furthermore, the warmer temperatures in the United States are coming and that of course will weigh upon the idea of demand, so while we are at extreme lows, it’s very unlikely that we will see things change substantially. Short-term traders will continue to press the market to the downside, as there is no reason to think that things will change. Look at rallies as opportunities, after signs of exhaustion to start selling. Do not look at rallies as an opportunity to play the market from both sides. If we break down below the $1.60 level, then markets could come completely undone. However, that seems to be very unlikely.
