Natural gas markets have shed quite a bit of the gains recently, as this week ended up being very rough. In fact, we ended up losing about 10% one point, which is a pretty catastrophic turn around, but when you look at the chart you can see that we are most clearly elevated. Perhaps we are about to get a nice pullback, which I think eventually gives you a nice buying opportunity. That being said, as far as the weekly chart is concerned, I am more likely than not going to be interested in shorting signs of exhaustion after extreme rallies. The main reason for this is that if you are a longer-term trader, you have to be thinking about springtime at this point, not necessarily winter.
NATGAS Video 15.11.21
I believe that the $4.50 level underneath should be significant support, and as long as we can stay above there, then the markets probably in decent shape. However, we get some type of spike and failure near the $6.50 level again, I think that would show that the $6.50 level is indeed the upper bound for the winter. Keep in mind that demand should be picking up rather soon, so it is probably only a matter of time before we see yet another spike. As this chart looks right now though, $6.50 may end up being the highs for the winter season.
You should also keep in mind that this is about the United States and not the European Union, which has its own set of problems. The Henry Hub Natural Gas market is solely a North American market, although it does have a certain amount of influence in pricing due to those willing to pay the export fees to get gas out of the United States and send it internationally.
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