The natural gas markets rallied a bit during the day on Friday, bouncing above the $2.85 level. By rallying, I think we are showing signs of the natural gas markets collecting profits on short positions, as the natural gas inventory announcement comes out today. Even more importantly for the markets, we have the jobs number coming out of the United States, that’ll have an influence on the US dollar. Because of this, I think that no matter what happens, the natural gas markets will be very volatile. A breakdown below the lows from the previous session on Wednesday census market down to the $2.75 level underneath, as it is massively supportive on longer-term charts.
Not interested in buying
Even if we rally from here, and show signs of real strength, I would not be interested in buying this market. I believe that the $3.00 level above continues to be massively resistive, so with this being the case I am a seller regardless of what happens, and I’m looking for some type of exhaustive candle to get involved. It’s unlikely that we will rally, but if we do it’s going to be a short-term opportunity more than anything else. This market is typically volatile, but with the oversupply that we see, it’s a most impossible to imagine that the longer-term it will be to the upside. I believe that we will break down significantly, and that being the case I think that we will eventually get to the $2.50 level underneath. Even if we broke above the $3.00 level, I believe that any rally from that point would probably be a short-term opportunity more than anything else. Volatility should remain, but certainly with a downward bias as natural gas is such a broken and busted market.
NATGAS Video 07.7.17
This article was originally posted on FX Empire