- Natural gas markets seemed to steady a bit on Thursday's trading session, and now it's like we're trying to figure out what's next.
- We're basically at the bottom of a recent range where prices have been moving, so the next move is important.
- To make sense of it, think about this as a kind of trading cycle because, honestly, short-term trading in this market can be all over the place.
As we move into the fall season, natural gas often picks up a bit. That's because people start thinking about winter, and that's when we need more natural gas for heating. Also, the European Union is looking to the United States for more natural gas because they don't have enough of it locally. So, expect this market to stay a bit crazy, but in the end, I believe that the cyclical pattern will kick in, and natural gas will start heading up again.
Now, there's a big hurdle at the $3.00 mark. We need to clear that to aim for the 200-day EMA and then maybe even reach the $5.00 level, which is my long-term target. Honestly, we might even go higher than that, but that's what I'm looking at right now.
The Market Continues to Try and Break Out
Below, there's a strong support level at $2.00, and even though a lot of this waiting for things to happen, I've chosen to trade this market through ETFs. It's a safer option because I can avoid using too much leverage. That means on days when the market drops by 2%, I don't lose too much. With leveraged positions like futures, that can be risky.
Remember, this isn't just a quick trade; it's an investment, so keep that in mind. Trying to time exactly when natural gas will rally in the winter can be tricky, but considering the current low prices, many longer-term traders and investors are holding onto a small stash of natural gas, hoping to cash in later in the year. If you look at the trading volume in the ETF market, it's clear that there's a lot of buying and holding going on. With this, I believe that the market continues to try and break out, but when that happens remains up for debate, and therefore I think that the market will be noisy as we go along.
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