March Natural Gas is down 5.9 cents at $4.93 this morning as  I write, following yesterday’s sharp selloff.  The included chart shows that the natural gas market is still trending down and is beginning to challenge its contract lows in the $4.70 area made a week ago.  In my opinion, since natural gas made new contract lows a week ago, March natural gas will need to find a low down here somewhere and then rally, then test and hold above the lows, and rally again to begin showing signs that a long term bottom is being made.  This up and down consolidation will be needed to last for a month or so to prove its support.  So, in my opinion, there is no reason to put on any long term positions in natural gas until proven otherwise.  During the winter season, there may be some times where it may be worth buying the closer in contracts, but without a lot of fundamentals coming into play, natural gas looks dead in the water.  The directional movement indicators have been bullish near term, but are about to cross back to the bear side if prices stay down today.  The ADX line continues to drop.  Most of my other indicators in natural gas are bearish.  I recommend standing aside in natural gas for now.

 David Hall

 The information and opinions contained herein comes from sources believed to be reliable, but are not guaranteed as to accuracy or completeness. The risk of loss in trading futures and/or options can be substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results.

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