At this point, I believe that the $2.82 level is offering a little bit of support in the natural gas markets port short-term trading, but I believe that given enough time we will certainly break through that level and continue to go towards the much more psychologically and structurally important $2.80 level. A break down below there sends the market down to the $2.75 level, and possibly even the $2.70 level after that. I believe that rallies are to be sold, and that the $2.90 level above will continue to be a massive resistance barrier that will be very difficult to overcome on short-term charts. If we did, then you could see a move towards the $2.95 level.
However, I believe that rallies are to be sold, and that we will eventually see enough momentum to break down the market and to go to much lower levels. I believe that the market will ultimately find reasons to break down, as the supply far outweighs the demand overall and of course the US dollar has been strong lately, except for perhaps the last couple of days.
I believe at this point, it’s probably a market dominated by short-term scalpers going in both directions, and that is probably how you should be looking at it, perhaps using something as small as the 15 minute chart if you wish to be involved in natural gas. Longer-term, to me it still obviously a very negative market but a volatile one to say the least.