Natural gas markets fell a bit during the trading session on Wednesday, dropping towards the $2.77 level. There seems to be significant support underneath there as well, and I think that it’s only a matter of time before value hunters come back into the market. However, I recognize that the $2.85 level as a major resistance as it is the middle of the longer-term range. If we can break above the $2.85 level, the market could go to the $3.00 level. I think in the short term though, we will probably get a slight pullback, only to find buyers underneath.
Natural gas markets continue to be very noisy, and longer-term I am fairly negative on this market, but I do recognize that there are a lot of value hunters near the $2.70 level with a massive support level down to the $2.60 level underneath. Overall, the market continues to be very noisy, so I would be cautious about putting too much money at work here, at least for the time being. Once we get closer to the outer range of the larger consolidation, then I become a bit more aggressive about putting larger positions. I don’t think we will break out of the longer-term range, I think we simply continue to bounce around.