Natural Gas Price Forecast – natural gas markets continue to fall

Natural gas markets fell again during the day on Thursday, slicing towards the $2.50 level as the market simply cannot get out of its own way. However, there is a massive amount of support underneath, so keep in mind that the market probably can only go so far to the downside.
Christopher Lewis
Natural gas daily chart, February 08, 2019

Don’t get me wrong: I am horrifically bullish on natural gas. I happen to live in an area of the United States that produces enough natural gas for most of the rest of the world. I know just how overabundant this commodity is, and that any rally that is significant in momentum is an opportunity to sell. We are clearly out of the bullish time of year as well. I think that we are oversold though, and quite frankly expecting a big move from here to the downside means that you are doing the worst thing you can do, chasing the trade.

NATGAS Video 08.02.19

With that in mind, I think you need to wait for a bounce, something that I’ve been saying for some time. Unfortunately, we have not had that happen, but I do think that the 20 day EMA, pictured in green on the chart would be the first area where you could consider shorting on signs of exhaustion. It isn’t that I have any interest whatsoever in buying this market, and in fact I simply will not do it. I sat out most of the bullish pressure during the dead of winter, knowing that we were going to collapse again. Quite frankly, the United States has enough natural gas in the ground to power the world for the next 300 years at the very least. Consider that Canada has even more, you can see where pricing power becomes an issue.

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