Natural gas markets have broken to the upside, clearing the $1.65 level during the New York session, so having said that it’s likely that the market will find sellers just above, something that I had suggested yesterday. I don’t know that we are quite there yet, but one would have to think that sellers have been coming back into this market to push lower. Alternately, the $1.80 level is even more interesting to me, and I would be more than willing to sell in that area. After all, with the economy grinding to a halt it’s difficult to imagine a scenario where the natural gas markets take off to the upside.
NATGAS Video 25.03.20
At this point, the market is likely to see selling pressure above, because of the long-term cyclical issues when it comes to the natural gas markets. Furthermore, the market has to deal with the idea of far too much supply out there and of course temperatures starting to rise due to the time year. With this being the case, I do like fading rallies and it looks to me at this point as the $2.00 has been a bit of a “ceiling” for the market, and therefore I think it’s only a matter of time before exhaustion steps and that you can start shorting again. As far as breaking above the $2.00 level, I don’t see that happening anytime soon, as the market has been negative for good reason. Quite frankly, natural gas is so abundant that it’s in the drinking water in several parts of the United States!