The natural gas markets have rallied a bit during the trading session on Wednesday as we roll over into the July contract.
By doing so, it looks very much like a market that wants to go looking at the 200-day EMA.
The idea that the market would rally at this point probably isn't a huge surprise because there will more likely than not end up being some type of heat wave that traders will be watching during the month of July. There's normally a little bit of a pop, but we also have to keep in mind that traders are starting to focus on the Middle East and the fact that there just doesn't seem to be any real market-moving positive headlines coming out as the 2 sides between the United States and Iran continue to disagree on pretty much everything.
Summer Seasonals and Technical Resistance
All things being equal, though, this is a market that I think will probably continue to be one that you have to favor the downside. The demand just won't be there. Again, there'll probably be a spike at 1 point during the summer, maybe 2 points, but overall, the heating demand, which is the real driver of natural gas prices from a stronger standpoint, just isn't going to be a thing.
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So, I'm looking to see whether or not we are going to fail closer to the 200-day EMA. If we do, I'm more than willing to sell this market. I might give it a day or 2 to kind of get there, but I am interested in shorting natural gas yet again.
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