Commitment of Trader's Report - Hedge Funds Liquidation Continues

Hedge funds have been getting their proverbial heads handed to them in the natural gas market over the past 4 months.

Funds accumulated a net long futures position of 395,000+ contracts near the June high.

But as the market peaked and fell back lower from the June high to new price lows for 2014, hedge funds have had to liquidate.

Friday's Commitment of Trader's report showed funds long 164,176 natural gas contracts, down 10,945 from the previous week.

If natural gas prices remain weak and trade down to a new lows, fund liquidation could continue.  But expect the funds to come back strong into the market once a bottom does form.

A breakout above 4.150-4.200 will indicate technically that a market low has been set.