The natural gas markets initially tried to reach towards the $2.79 level above but broke down significantly from there to reach below the $2.77 level. It looks as if the market is getting a bit exhausted as I record this video, and I believe that we will continue to drift lower, perhaps reaching towards the $2.75 level, and then eventually the $2.71 level again. If we can break down below the $2.70 level, the market could unwind rather drastically, perhaps reaching down to the $2.60 level underneath. That has been the bottom of the larger consolidation area, and I think that the market participants will look at that as an excellent buying opportunity. It also makes a juicy target for sellers. Because of this, I think we will eventually go looking towards that level.
In the short term though, it’s likely that we will try to reach to at least the $2.70 level, where the significant demand returns. Short-term traders will continue to sell short-term rallies as we have seen during the day, and I think it’s only a matter of time before they get their way. Even if we did break higher, for me I believe that the $2.80 level and the $2.85 level will both be far too resistive for the market over, in the short term. Expect volatility, but certainly the downside is the safer bet.