Natural Gas Price Forecast – Natural Gas Continues to Look Vulnerable

Natural Gas Technical Analysis

Natural gas has blown up again during the early hours on Thursday and I can always tell this because my email box suddenly gets full of people who are panicking because they jumped into natural gas with a huge position looking at the potential returns. The reality is this time of year is miserable for natural gas under most circumstances. Because of this, I think you’ve got a situation where natural gas will continue to be noisy, and I think it continues to be very ugly, quite frankly.

So, with that being said, I am a bearish trader when it comes to natural gas, even though I also have a position on. Now my position is in the ETF markets, which of course offers the ability to trade natural gas without leverage. It’s an investment, that’s all it is. I know I say this every day, but I cannot pound it into your head hard enough that natural gas is not a retail trader’s market. You should not be bothered with it at all. But if you do, you certainly don’t want to use leverage, it’s a great way to destroy your account.

To begin with, most traders don’t even know what they’re trading. You are trading the Henry Hub contract in Henry, Louisiana. So, in other words, it’s a US market. It’s not Dubai, it’s not Kazakhstan, it’s nowhere like that. Nobody really cares what’s going on in Europe over here, as only a certain amount of natural gas can be exported anyway.

So, at this point in time, you have to pay attention to weather patterns in such exotic locales as Boston or Philadelphia, Pennsylvania. If temperatures plunge there, then it drives up demand for natural gas. In the summertime, it can be a heat wave that drives it up. And we had seen that previously, but right now there’s nothing to lift the market. So, I think short-term, you can dip your toes into an ETF position or a minute CFD position recognizing you may be sitting on it for a couple of months before you take what I believe will be sizable profit.

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