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Christopher Lewis
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Natural Gas

Natural gas markets have initially tried to rally during the trading session on Monday but have also pulled back a bit from the 200 day EMA. The $2.60 level of course is a large, round, psychologically significant number, and the scene of a gap previously that had been filled. Ultimately, this is a market that I think continues to see a lot of selling pressure above, and therefore I am more than willing to fade this market. After all, the demand for natural gas will more than likely drop over the next several months, as temperatures rise over the next several months. After all, we are heading into the springtime and then eventually summer. While natural gas is used to cool off as buildings and the like during summertime, the demand is much less than it is in the wintertime.

NATGAS Video 13.04.21

Furthermore, there are a lot of questions as to whether or not we will see a significant amount of pressure due to a strengthening US dollar in general. That being said, the market was to break down below the bottom of the candlestick for the trading session on Monday, then I think it opens up a move down to the $2.40 level, possibly down to the $2.25 level after that. One thing that we see time and time again is that this time of year is typically very negative for natural gas, so there is a bit of a longer-term cyclical trade involved in this market. All things been equal, I am a seller or not a buyer, in fact I have no interest in buying natural gas till at least October, perhaps even later than that depending on how weather plays out.

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