Christopher Lewis
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Natural Gas

Natural gas markets have rallied a bit during the course of the trading session on Friday to close out the week on a positive foot. Having said that, we are sitting just below the 200 day EMA and a gap that could cause some resistance. Furthermore, and perhaps even more important is the fact that we had hit major support underneath so it makes quite a bit of sense that there would be a certain amount of resiliency. With this being the case, the market turn around and breaking down below the $2.40 level would show even more weakness and probably get me aggressively short.

NATGAS Video 22.03.21

More likely than not though, I think we may have a day or two of potential positivity that we can focus on and look for cracks in the ice to start selling. Because of this, I am simply going to sit on my hands for the next few days and then look for a long way to the upside to think about shorting again. This is a market that obviously has some issues ahead of it, not the least of which would be the fact that demand is going to fall off of a cliff over the next couple of weeks. As it gets warmer, it will care less and less about natural gas. The natural gas oversupply then becomes a major issue, and therefore prices fall. This is what we have been seeing over the last several weeks anyways, so I think this bounces just your typical everyday run-of-the-mill type of reaction that markets will have after an extended move.

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