Natural gas markets have filled the gap that formed last week, and have consequently turned right back around. This does suggest that we may get a continuation of the negativity, especially as the 200 day EMA sits just above as well. Warmer than anticipated temperatures in the United States will continue to be a major problem, and therefore you need to assume that we are going to continue to see trouble for pricing. The shape of the candlestick of course is very bearish, so I think it is probably only a matter of time before we reach down towards that area we were just in. If we can break down below the $3.65 level, it is very likely that the bottom will follow out of this market.
NATGAS Video 14.12.21
If we were to turn around and take out the $4.25 level, that would be very bullish, but I think only temporarily. The $4.75 level is what I considered to be the ceiling at the moment, especially as we are already trading the January contract. All things been equal, we are starting to price in spring, because quite frankly the market will continue to look at this through the prism of declining demand. Yes, I recognize that Europe and Asia are both struggling to find enough natural gas, but the United States does not export enough natural gas for it to be overly affected by this market. Expect a lot of choppy volatility, especially considering that the market has been noisy to begin with, and we are heading into the end of the year, a time which typically is very noisy to say the least.