Natural Gas Simmering Down, the Close is the Call

August 3, 2017 12:41PM CDT

The trend in September natural gas is still down. Resistance is at 2.900 –2.850. Support comes in around 2.75. Our target objective is 2.67 -2.70. The breakout beneath July’s consolidation on a daily chart may signal a sell off below 2.70. A close above 2.90 will change the trend to new higher range.

Momentum studies are moving lower, and the 9, 18, and 27 period moving averages are also trending lower, which could signal more downside action. Today’s storage number came in at an increase 20 bcf, almost the expected 23 bcf, while the 5 year average is 44 bcf injection. Our inventory of gas surplus is still 4% above the average as well. Below normal temperatures are predicted over the next two weeks and could hold for as long as Mid-August. With no real cooling demand, gas should struggle to gain any ground. COT is not at record highs, but still shows a sizable number longs that might contribute to selloff should standing stop orders get hit. Position yourself with exposure to the down side of the market. Bear put spreads or outright shorts are something to consider until the market closes above a corrective high.


Sep '17 Nat Gas Daily Chart

Sep '17 Nat Gas Daily Chart 

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.