Natural Gas Markets Get Clobbered
Natural gas markets have gotten absolutely crushed during the trading session on Thursday as the $5.50 level seems to be too much for the market overcome. This was an area that I suggested could be significant resistance, and we have in fact seen that come out to be true. At this point in time, the market looks as if it is trying to break down rather significantly, and it is obvious that the market got too far ahead of itself and now we are starting to come back to equilibrium.
NATGAS Video 04.02.22
That being said, the market has much further to go to the downside and therefore I am more than willing to hang on to the sell position going forward, as natural gas is clearly going to continue seeing a lot of volatility and negativity due to the fact that the storms of course have spiked price, but this is a short-term effect more than anything else. After all, the natural gas markets have a cyclical balance to them, as we can see that the markets are currently trading the March contract, which of course is the beginning of spring in the northern hemisphere. Because of this, it is likely that demand is going to start falling off of a cliff, I have no interest in buying this market anytime soon.
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To the downside, I believe that the market probably goes looking towards the 200 day EMA, perhaps even down to the $3.50 level after that. Quite frankly, I have no interest in trying to buy this market, because the cyclical attitude of this market suggests that we should be selling rather soon.
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