Natural gas markets have pulled back from the $2.90 level rather stringently, showing signs of negativity. If we can break down to a fresh, new low, the market should then go down to the $2.80 level, and eventually the $2.70 level after that. The market has been consolidating for quite some time, and we had gotten a bit too close to the highs recently to continue going to the upside. At this point, I think that the $2.90 level will continue to bring in a lot of fresh selling, and even bullish inventory numbers won’t do much to hold the market up for the longer-term as the $3.00 level has been extraordinarily resistive.
The $2.70 level underneath is massive support though, so I think that’s about as low as we go. I intend to continue to play the range going forward, unless of course it gets smashed somehow. It’s been very reliable for quite some time now, so I don’t have any interest in trying to front run any type of major move. I believe that more of the same as in store, and for those who can take the longer-term outlook, this is a great market to trade. The day-to-day operations of the natural gas pits are a bit more nauseating though, but at the end of the day there are clear boundaries if you step back and look at the weekly charts.
