Natural Gas Markets Claw Back Some Gains For Friday
Natural gas markets rallied a bit during the day on Friday, after initially gapping lower. However, this is a market that continues to be overextended, and I think at this point we will probably struggle to reach the highs again.
Natural gas markets gapped lower to kick off the trading session on Friday, and we did of course rally rather significantly. However, this is a market that has gotten a bit ahead of itself, and I think what we are seeing now is a situation where the market is of course seasonably bullish, but also we have seen a massive burn of inventory. However, the longer-term outlook for natural gas remains bearish, because quite frankly we have more of it in the United States that we know what to do with. Because of this, I think there is a short-term opportunity to make money to the upside, but it is only a matter time before the sellers step back in and push this market back down as we have gotten so far ahead of ourselves.
At this point, I think that selling signs of exhaustion will probably be the best way to go forward, and I think ultimately we will probably break back below the four dollars level, perhaps even lower. However, look for exhaustive candles on this rally to fail and show signs of selling opportunities. It’s not necessarily that the market is going to be bearish, just simply we have gotten far too ahead of ourselves. I think the market got way ahead of itself, and I believe that the sellers will probably get aggressive now that there are several gaps below that need to be filled. Be cautious but sell exhaustion.
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