Natural Gas Weekly Technical Analysis

The natural gas market initially fell during the week, continuing the weakness that we had seen for the previous two weeks and then turned itself around to show signs of strength. We are fighting a couple of shooting stars and the 50-week EMA at the top of them. So, I think this is a situation where if we can break above $2.40, we could see a pretty big move to the upside.

That being said, this is a market that typically is still a bit quiet this time of year, although we are starting to think about autumn, and possibly winter, and therefore we are starting to see people step in and buy the market. I like buying an ETF with a small part of my portfolio, mainly due to the idea that the volatility is extreme, so I don’t have to worry about massive swings in profit and loss statements. And of course, the market taking off for colder weather is somewhat of an unknown.

We don’t really know when that’s going to happen, but I do know that it will happen in the next few months. So, I want to be positioned for that move. And once we spike, I’ll just take advantage of that as profit and move along. It’s something I do every year. And right now, is about time you start to see people look ahead and try to get involved in this market.

Ultimately, this is a market though, that is based on US weather. So, unless you have a good handle on that, you’re probably going to struggle. And that’s part of the reason why I take the leverage out of the equation.

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