Hi Everyone, welcome to another week of chaos.
We’ve got a lot to watch and think about.
For half of last week, we were attempting to break $4. We ran into the 20 Daily EMA, which acted as strong resistance on some charts, and Support on other.
Ultimately, a lot is starting to align with the $4, to see a sustained bearish down trend, we’d need to concur the Daily 20 EMA, and then next the Daily 50 EMA, which is sitting at around $2.9, so very very close.
On Friday, the weather trended a bit colder, but since then, has recovered a bit more of the warmth.
The projections remain mostly the same for the upcoming reports.
We’re set to wipe about 80BFC or more off the Deficit within the next 3 weeks. That leaves another 8 weeks after to get the rest, I believe it’s achievable.
The bulls are slowly running out of reasons and room to continue holding prices up.
The Trump administration continues to drive their low Energy cost policy by taking away restrictions that hold producers and exporters back.
Trump attacking the Houthi’s might give the market a reason to bounce, but I’d be shorting that bounce and any rally we have for now, but only if the Weather and Production continue to hold or improve.
Production has continued to grow regardless of Canada’s cut back, which is a positive for Natgas.
Demand has tanked and has remained below Production output.
Don’t underestimate the affect a slowing economy or as Potential US recession.
The consumer survey’s from Michigan were terrible last week. Inflation expectations soared, whilst confidence tanked.
Even if a recession doesn’t come to pass, Natgas at $4 is very expensive for most people. The consumer won’t be able to afford such high prices, and will drive demand low. I believe we’re already seeing that in the data.
This isn’t coivd anymore, the consumer is running out of Money and is stretched. The tolerance for high energy costs is gone.
The cure for High prices, is High prices.
Ultimately, I’m still aiming for $3 at the minimum. I suspect we’ll have enough reason to revisit $2.8 and maybe even $2.5 before the summer run.
That’s only approx 30% down from here, perfectly achievable for Natgas.
$4 and the 50ema is the ultimate goal this week. Bears need to contend with both, I suspect they’ll both be defeated.
Since Friday, the Deficit has already recover 1%. That’s ultimately the driver here.