The natural gas market has rallied a little bit during the trading session on Friday, but it is worth noting that we are thin due to the holiday session in the USA.
Natural Gas
The natural gas market has rallied a little bit during the trading session on Friday, but keep in mind that this has been a holiday in the United States. So, in other words, liquidity would be an issue. The bulk of trading, of course, would have been during the Asian session, and no disrespect to our friends in Asia, the reality is that the volume is done during New York trading.
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Natural gas markets have been very flat for several weeks, so even if this weren't a holiday, I don't know how different the candlestick would be. We are hanging around the 200-day EMA, and I think this remains a short-term back-and-forth type of trading situation. If you drill down to a short-term chart, then you can see a clear pattern of back-and-forth, and if you are a day trader, this might be the route to go.
Massive US Supply Overhang Caps Heat Wave Upside
From a longer-term perspective, the natural gas market will remain, I think, somewhat locked in place despite the fact that there is a heat wave going on in the United States right now, mainly due to the fact that traders are more likely than not going to look at the fact that the supply is so voluminous right now in the United States that a few days of extraordinarily hot weather isn't going to be enough to drag things down.
This time of year, if we get some type of rally, I do not hesitate to short the market at the first signs of exhaustion because, quite frankly, most of this is going to be driven by heating demand, and of course, we don't have that. Air conditioning being cranked up, of course, has a major influence short-term, but over the longer-term, again, I think this is just a blip on the radar.
We stay between the $3.00 level on the bottom and the $3.50 level on the top for your large range, and right now, I think you're just seeing the market kind of churn here right around the 200-day EMA. Again, if you're a short-term trader, this is an excellent range-bound trading opportunity in the natural gas market. Think scalping for a few ticks here and there.
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