- The natural gas market has shown itself to be a little bit positive during the trading session.
- Now keep in mind the gap that you're seeing on the chart on the daily timeframe here has to do with the rollover.
- We have changed into the September contract in the futures market, which makes a little bit of sense that perhaps the September contract has a touch more demand than August.
But really at this point, natural gas is still a very bearish market, and I am watching the $3 level very closely. If we can get anywhere near $3 and start to see selling pressure, I am looking to fade the first signs of weakness. We'll have to wait and see how that plays out, but as things stand right now, I think you've got a situation where this is a market that given enough time, we'll have to make a bigger decision. The winter months are coming and once we roll over a couple of contracts, I fully anticipate that natural gas will rip to the upside, but we're not there right now.
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I still look at the $2.50 level as a viable target. We'll just have to wait to see how price action behaves, but right now we've got a scenario where quite frankly, we're in a major downtrend, and a bottoming pattern in the natural gas market will take time regardless. So, you still have to lean towards the downside, I think at this point, recognizing that the natural gas market is going to be skewed by a lack of heat waves in the United States and a lack of heating demand. That being said, the seasons will change and once they do, you'll see each contract over the next several rollovers successively get a little bit positive.
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