The natural gas markets have rallied significantly during the course of the trading week to reach towards the $6.50 level before rolling back over. At this point in time, the market is looking very exhausted, which is not a huge surprise considering that we had gotten so parabolic. At this point, I have to question whether or not we have put in the top? That is a question that remains to be seen, but at this point in time it is very likely that we will be paying close attention to the idea of whether the winter is warm or cold, and that will throw this market around quite drastically.

NATGAS Video 11.10.21

Yes, there is a significant lack of supply at the moment, but the question is how much longer will that last? It is likely that the market may have gotten far too ahead of itself at least in the short term, so I would not be surprised at all to see the $5.00 level tested. If we break down below there then I would start looking towards the $4.50 level for support, and then eventually the $4.00 level.

Historically speaking, we are heading into a bullish time of year, so I do think that it is only a matter of time before people get involved, but maybe not necessarily at the $6.00 above. That being said, if we were to break above the $6.50 level, that would lead to an even more parabolic move, but at this point one would have to wonder how many people would be willing to buy at that region?

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This article was originally posted on FX Empire


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