Natural gas markets continue to find resistance above and extending all the way to the $3.00 level. I anticipate that will continue to be the case in this market, and I have no interest in trying to fight that trend. We have been consolidating for some time, and I think that will continue to be how this market behaves. I don’t like the idea of buying this market into this resistance, and I would suggest that signs of resistance are to be sold as we approached the $3.00 level, which I think it extends all the way to at least $3.05 bare minimum.
The $2.90 level underneath should be supportive, so if we break down below that level it should end up being a nice opportunity to short yet again, perhaps adding a contract on the way down. Natural gas markets are notoriously volatile, but they also are struggling to break out of this well-defined range that we have been in for ages. You might as well take advantage of it, as I have found natural gas to be one of the easiest markets to trade over the last couple of years. The $2.70 level below is the beginning of significant support, so it would make that my target, recognizing that it becomes more of a swing trade more than anything else, but clearly we have gotten a bit high up in the consolidation to be comfortable going long here.