The natural gas market has been somewhat sideways for a few weeks now, as we are still trying to sort out whether or not the market will bounce from here. After all, there is a seasonality to this market that cannot be ignored.
The natural gas markets continue to be very noisy and choppy, but at this point in time, I think we have a situation where we are trying to form some type of bottom in the market. Short-term pullbacks will end up being buying opportunities for value and I do think that later in the year, we obviously have the demand going through the roof as temperature in the United States start to drop.
That is a major driver of what happens with natural gas every year. So recently I’ve been adding to a position with no leverage and, therefore it’s very quiet and the day to day noise is completely eradicated for me. I do it through an ETF. You can do it through CFD markets, but you have to do it with very small positions.
Eventually we could take off to the upside and once we do, and we should, as we head into fall, I’m just going to collect my profits and make it part of my portfolio and gains for the year. This is something I do every year. It’s not a huge part of what I do, but it adds a few percent to my yearly gains.
I have no interest in shorting this market because we are at such extreme lows, but again I don’t want to be heavily levered to this market because I could be sitting here for a month and a half and shaken out of the trade. You need to be in a position where it doesn’t bother you that it is somewhat volatile.
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Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.