Natural Gas Price Forecast – natural gas markets sluggish on Friday

The natural gas markets gapped higher slightly at the open on Friday, but as we entered trading during the open pit session, we essentially went nowhere. This is a market that is testing major support, so I think that’s part of the hesitation.
Christopher Lewis
Natural gas daily chart, February 11, 2019

Natural gas markets gapped higher at the open on Friday but found very little in the way of momentum in either direction. At this point, I think that the natural gas markets are overextended to the downside, and quite frankly the $2.50 level underneath is massive support going back a couple of years. Because of this, I would fully anticipate that we should get some type of bounce. After all, there will come a time where it costs more to produce natural gas then you can get for it. Once that happens, then the supply will dwindle and we will start to see prices rise again. However, I’m not willing to buy any bounced at this point because this is a very bearish market from a longer-term standpoint.

NATGAS Video 11.02.19

Natural gas is oversupplied commodity. Quite frankly, this is a lot like the 1980s in the gold market, where you just sell every time it rallies. If you wanted to know how to become an extraordinarily profitable trader in the futures market: sell natural gas on signs of exhaustion. Unfortunate, that means you need to sit on the sidelines in areas like this, because you need a better opportunity to sell. Selling down here means that you believe that we are going to make fresh, new lows going back a couple of years, and even if you do get that then the next question you have to ask yourself where we are going next? For me, it’s much easier to sell signs of exhaustion than trying to guess some imaginary figure underneath.

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