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Christopher Lewis
Natural Gas

Natural gas markets gapped lower to kick off the trading session on Monday, as we continue to see a lot of volatility in general. That being said, the market reached towards the $1.66 handle, which is roughly where we had seen previous support. That should now be resistance based upon “market memory”, and therefore it makes quite a bit of sense that we are stalling in the short term region. That being said though, natural gas markets are still very much in a parish market, so there’s no need to be buying down here.

NATGAS Video 24.03.20

To the upside, I see a couple of prime selling opportunities, especially considering that the energy markets are going to be hit by a wave of closures around the United States. Natural gas demand is going to fall off of a cliff, at least temporarily. Furthermore though, the heating aspect of natural gas demand is going to be pretty much nonexistent for several months, so until then it’s very unlikely that there is going to be a longer bullish move. Having said that, there are a lot of concerns about the credit markets for fracking companies, as the low price of both natural gas and oil has been causing massive losses in this sector. If we get massive bankruptcies, that could help drive up the price of natural gas, but beyond that I don’t see much help for the markets longer-term. Notice that I have an arrow at the $1.80 level and the $2.00 level. Both of those are areas I will be looking to short if we get some type of exhaustive candlestick.

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