Natural gas rolls over again on Monday

Natural gas markets fell during trading on Monday, reaching down towards the $2.65 level. However, I think that the $2.60 level is much more important, so I’m looking for the market to continue to grind towards that level. I think that there is a significant amount of support down to the $2.50 level after that, but I believe that this support continues to offer a lot of support longer-term, and I believe that it would be very difficult to break down below the $2.50 level. If we did breakdown below there, it would be catastrophic for the natural gas markets, and unwind them to who knows where?

In the meantime, I believe that when we bounce, it will give us an opportunity to start selling, and I will do so every time we show signs of exhaustion. Natural gas continues to suffer from oversupply, and that isn’t going to change anytime soon. In fact, this is a structurally soft market, and will continue to be so. I believe that the $2.80 level will be resistance, and I would love to sell from there. On top of that, the $3.00 level should be massively resistive as well, and I would become even more aggressively short on signs of exhaustion in that vicinity as it has been a long-term structurally negative area for buying. I don’t have any interest in buying this market, I think that the longer-term situation will dictate that the sellers come back given enough time, with no signs of the underlying situation changing.

NATGAS Video 10.04.18