Natural Gas Looking for Support on Downward Slide

July 19, 2018 10:28AM CDT

The Sep ‘18 natural gas futures contract is clearly down today.  For five days now, the trend has been going straight down.  It is reaching toward the bottom of the trading range and is challenging the Dec ‘18 low of $2.529.  If it closes below $2.650 look out below.   A close above the area of $2.800 is needed to reverse the trend and bring bullish forces back into play.  Momentum studies are trending lower and are getting near oversold levels.  Caution should be exercised, because we are still waiting for a divergence to change our bias toward the direction of the market. 

The storage number today is 46 bcf, right around the 3-yr range.  Last week’s number of 51 bcf was average at best.  Production increases balance between normal or slightly below normal weather around the country and heat in the South and West.  I still like the exposure to the short side of the market, with caution toward a change in direction due to a reversal in momentum studies like RSI and MACD.

Natural Gas Sep '18 Daily Chart

Natural Gas Sep '18 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.