RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Yesterday’s close lower signals for a probing lower, searching for bottom.  Support can be seen near the 2.500 mark.  Resistance just below 2.800, above Monday’s is seen as a corrective high to turn the major trend.  So far, today’s candle looks promising for the Bull camp, new lows were reached, but price action seems to be trying to fight back toward yesterday’s close.  Momentum indicators are bottoming.  Divergence between the indicator and price action may accelerate the upward move.  The large short position cautions that if buy stops start getting hit beware of a quick move in the opposite direction.

I’ve seen estimates for a very large draw (-160 bcf).  A large draw may serve to balance December supply and demand, and drive prices back to a higher range.  A smaller than expected draw might send prices tumbling for another day.  Below normal temperatures are forecast for the end of December.  It seems that old man winter will finally arrive.  A cold extension to the longer term forecast could send prices back to the 2.900 to 3.000 range.  I’d like to be long once divergence is confirmed.  Careful bullish exposure through option and spreads might be warranted. 

Natural Gas Feb ’18 Daily Chart


Jeff Ratajczak

Jeff attended Illinois State University. In 1993 Jeff began his financial career in the stock market as a retail broker. He transitioned to futures in 1999 with LFG Intermarket Group, which became ZAP Futures. In 2004 ZAP Futures was acquired by RJO Futures' parent company R.J. O'Brien. Jeff's focus is to assist clients in managing risk and speculate through futures and options strategies.