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Christopher Lewis
Natural Gas

Natural gas markets have gapped lower to kick off the trading session on Wednesday to fall down towards the 50 day EMA. The 50 day EMA has held so far, so at this point I think that the market is likely to try to find some stabilization in this area. I had suggested previously that you need to see some type of bounce or hammer or something like that in order to be a buyer. This is roughly the area I am looking for that. If we can hold above the $2.40 level it is likely that we could turn around again. I think if we can break above the highs of the session for Wednesday, meaning clearing the $2.55 level, that is probably also a signal to start buying again.

NATGAS Video 01.10.20

Do not forget, we have seasonality working in our favor here on the natural gas markets, as the temperatures will plunge in the United States and Europe over the next couple of months, driving up demand. Furthermore, you should keep in mind that we are trading the November contract in the futures market, so price will be reflected as such. I do believe that natural gas markets are going to continue to grind higher, and the keyword is probably “grind.” I have no interest in shorting this market, due to the fact that the demand should overwhelm supply, at least for the short term. If we break down from here, I will simply be looking for an opportunity to buy natural gas at an even better price. All things being equal, we will eventually roll over in the long term, but right now this is a market that you do not want to try to get to negative on.

For a look at all of today’s economic events, check out our economic calendar.

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