Natural Gas rallies during volatile trading on Wednesday

Natural gas markets initially fell during the trading session on Wednesday but found enough support near the $2.62 level to turn things around and rallied towards the $2.68 level above. The market has plenty of resistance just above, and I think it’s only a matter of time before we find exhaustion above that we can take advantage of. The $2.75 level above is massive resistance, followed by the $2.80 level. Ultimately, this is a market that should continue to be very choppy and noisy, but I think it makes more sense to start shorting this market on signs of exhaustion, as the overall fundamental attitude of the market is one of oversupply, which of course is bad for pricing.

I believe that there is a massive amount of volatility in this market just waiting to happen, and there should be a massive amount of supply still out there for the natural gas markets. The overall attitude of the market continues to be very negative, and I think that the outlook of this market is going to be more of the same. I believe that if the US dollar continues to show signs of strength, it will only add more bearish pressure in this market. I have no scenario in which a willing to buy this market, as the $2.80 level and the $3.00 level above will both be massive resistance that we can’t break above. Longer-term, I think there is massive support near the $2.50 level, so I think that we are going to be range bound with the downward tilt.

NATGAS Video 12.04.18