Today's rally in the natural gas market which lifted the spot July 15 contract higher by 4.4% was very similar to the beginning of the late-April rally during which the market gained over 25% over a period of 4 weeks.
Prior to today's bullish turnaround, the natural gas market had been in a three week downtrend which dropped the July contract lower by 18% from the 3.150 May high. The market bottomed out last week at a 2.556 low holding above the 2.443 weekly low set in April.
The inability to push under the April low brought in a wave of short-covering today blamed by the market "analysts" on increasing weather demand.
The 2.450-2.550 area has now been solid support the past 2 months and may be an area at which a market low is set.
However, there is going to be a change in the fundamental factors which are still overwhelmingly bearish including 9 weeks of high storage injections and longer term weather forecasts.
Weather-related demand will need to increase or production which has been near a record high will be to decrease or a combination of the two will need to change in order to turn the market back higher.
Today's rally may be a start of a changing trend in the market as it enters into the heart of the summer cooling season.
If prices close strong this upcoming Friday in the face of bearish market fundamentals, it could an indication that bearish news has largely been discounted into the market price.
It could also be an indication that a long term price low has been set similar to the low of 2012 as shown on a previous post today.
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