Natural gas markets have pulled back from the $2.90 level rather stringently, showing signs of negativity. If we can break down to a fresh, new low, the market should then go down to the $2.80 level, and eventually the $2.70 level after that. The market has been consolidating for quite some time, and we had gotten a bit too close to the highs recently to continue going to the upside. At this point, I think that the $2.90 level will continue to bring in a lot of fresh selling, and even bullish inventory numbers won’t do much to hold the market up for the longer-term as the $3.00 level has been extraordinarily resistive.

The $2.70 level underneath is massive support though, so I think that’s about as low as we go. I intend to continue to play the range going forward, unless of course it gets smashed somehow. It’s been very reliable for quite some time now, so I don’t have any interest in trying to front run any type of major move. I believe that more of the same as in store, and for those who can take the longer-term outlook, this is a great market to trade. The day-to-day operations of the natural gas pits are a bit more nauseating though, but at the end of the day there are clear boundaries if you step back and look at the weekly charts.

NATGAS Video 31.08.18

This article was originally posted on FX Empire

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