Natural Gas Corner - A Technical Look At Long Term Price Lows

The natural gas monthly chart shows the new 3-year low set last week at the 1.948 level by the now expired November 15 contract.

The new front month December 15 contract is currently trading .300+ above last week’s low which should be retested as support in upcoming trade.

Whether or not support can hold will be a key technical test for the natural  gas market.  If the 1.948 support area can hold over the next few weeks of trade, a long term low could be set in the natural gas market.

If 1.902-1.948 support is broken, the 1.760 low from September 2001 will become the next longer term support area.

Dow Jones - Natural Gas Slips On Weather Outlook

DJ Natural Gas Slips on Weather Outlook

  By Nicole Friedman

  NEW YORK--Natural gas futures dropped Monday on continued expectations for weak demand, as warmer-than-normal weather
is expected to persist.

  Natural gas futures recently fell 5.8 cents, or 2.5%, to $2.263 a million British thermal units on the New York
Mercantile Exchange.

  Moderate temperatures at this time of year reduce demand for natural gas as an indoor-heating fuel. Above-normal
weather is expected to continue in the next 11 to 15 days.

  Current weather forecasts are calling for "about 75 to 80% of the U.S. to experience above-normal temperatures
thought the middle of November," which is "decidedly bearish for nat gas heating-related demand," said Dominick
Chirichella, analyst at the Energy Management Institute.

  Prices could fall further as mild weather persists, said Andy Weissman, chief executive of EBW AnalyticsGroup, in a
note.

  "With available storage rapidly diminishing and space heating demand potentially declining week-over-week, cash
prices are likely to decline further," Mr. Weissman said. However, he added, "space heating demand will start to rise
by mid-November, slowing the decline."

  Production remains robust, even as companies have cut spending, as drilling has gotten more efficient. Natural gas
production rose to a new record high in August, the Energy Information Administration said Friday.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $1.915/mmBtu, compared with Friday's
range of $1.87-$2.05. Cash prices at the Transco Z6 hub in New York last traded at $1.50/mmBtu, compared with Friday's
range of $1.25-$1.75.

  Write to Nicole Friedman at nicole.friedman@wsj.com

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  (END) Dow Jones Newswires

  November 02, 2015 10:37 ET (15:37 GMT)

  Copyright (c) 2015 Dow Jones & Company, Inc.

110215 15:37 -- GMT
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Natural Gas Corner - Morning Update

Natural Gas Corner - Technical Update - A Rough Start To The Week For The Bulls

The December 15 natural gas contract rallied back higher on Friday helping to mitigate a disastrous week for longs in the natural gas market. 

The December contract gained .064 or 2.8% in Friday’s session but lost .172 (6.9%) for the week settling Friday at 2.321.

An open gap area was created on the continuation chart with expiration last week of the lower priced November 15 contract.  The open gap begins at the 2.188 contract low for the December contract set on Friday and extends down to 2.115 and is primary support.

Longer term support is the new 3-year spot contract low set last week at the 1.948 level by the November 15 contract.  Last week’s low also held above the April 2012 low at 1.902 as support and could be a second and final seasonal low for 2015 ahead of winter.

Near term, the market should remain weak as it retests above mentioned support levels.

2.325-2.340 is the first level of resistance today with longer term resistance at the 10 day moving average currently at 2.420.

Friday’s Commitment of Trader’s report showed the funds long 81,096 futures contracts, down 6,859 from the previous week.

Technical Indicators:  Moving Average Alignment – Bearish

                                         Long Term Trend Following Index – Bearish

                                         Short Term Trend Following Index - Bearish

MDA Weather Services Earthsat 15 Day Weather Forecast - No Winter Heating Demand In Sight

Natural Gas Corner - Seasonal Price Trend Update - Still Searching For A Post-Summer Low

The seasonal trend chart for natural gas shows the historical price trend over the past 3 and 5 years.

It is getting a bit late for a seasonal low to be forming in the market, but it is coming.  Last week's spike down by the now expired November 15 contract to the 1.948 level could be the second and final seasonal low for 2015.

However, expect a retest of the November low as support first by the December 15 contract which is currently trading over .300 above last week's low. 

If support can hold in upcoming trade, a long term low could be set in the natural gas market.

Commitment of Trader's Report - Natural Gas - Funds Crushed In Last Week's Trade

The funds came into last week's trade long the natural gas market which didn't turn out too well as the market was pounded down to a new 3-year low.

Friday's Commitment of Trader's report showed the funds long 81,096 natural gas futures as of last Tuesday's close down 6,859 from the previous week.