March Natural  Gas is down 6.7 cents at $5.51 this morning as I write.  The included chart shows that natural gas has been rising sharply lately.  The current cold weather spell and hopes that manufacturing demand will begin to pick up is helping to support natural gas prices.  I would suggest that when this current cold weather spell moderates, that we will see natural gas prices set back, possibly sharply again.  The fact is that there is 800 billion cubic feet of excess supply that needs to be worked off just go get supplies back to normal.  That is going to take a couple months of much below temperatures, consistently, to accomplish, in my opinion.  Either way, I see this as a sharp rally within an ongoing bear market.  The directional movement indicators are bullish and believe it or not, the ADX line is beginning to rise which is trying to confirm that there is strength behind this bull move.  That will be taken into consideration as time goes on.  The problem is that not all of my other technical indicators are bullish yet and we haven’t even taken out a previous weekly important high yet either.  The key resistance overhead eventually will be the weekly highs in the $6.20 area.  If natural gas prices can continue to rally and take out those $6.20 highs, that would truly be impressive.  For now, I recommend standing aside in natural gas.  I suspect that there will be more tests down towards the lows again following this current cold weather spell.

 David Hall

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