Natural Gas rallies on quiet Tuesday session

Natural gas markets rallied a bit during the trading session on Tuesday and what would have been very quiet trading. I believe that the market will continue to offer plenty of resistance above, says only a matter of time before we see some type of exhaustion to start selling. I think that the $2.75 level is resistance, unless of course we break above there and then go to the $2.80 level. I like the idea of shorting the first signs of exhaustion, because quite frankly the natural gas markets have been very soft for some time, and it should continue to be the case.

If we break above the $2.80 level, that could send the market to the $3 level above, but I think that seems very unlikely. I continue to look for exhaustion after short-term rallies to take advantage of the potential for selling. I have no interest in buying this market, because the oversupply issue continues to be a major contributing factor to selling pressure, and of course the lack of demand due to rising temperatures in the United States will also pressure this market to the downside. I believe that the $2.60 level underneath is the beginning of significant support down to the $2.50 level.

I believe that the market will continue to be very noisy, but I think that there are plenty of reasons to believe this market will roll over a bit. I don’t know if we will break down below the $2.50 level, but if we did it would be catastrophic for natural gas overall.

NATGAS Video 04.04.18