By FXEmpire.com
If you have been reading our articles and watching the videos, you know that the natural gas markets are some of the most bearish futures markets around the world at the moment. The Tuesday session saw a serious breakdown yet again, and if you took our analysis to heart, you are presently profiting from this massive down trend.
While many had predicted that the bottom was in, we stayed back and let this oversold market have its well needed bounce. To think that the commodity was going to fall straight to zero was wishful thinking, but it is obvious some of the weaker shorts in the marketplace had jumped out on this latest pop. The most obvious resistance point was $3 to us, and it wasn’t until we got over that level that we would even consider buying. Needless to say, we never did, so we never bought into the rally at all.
With supply being so heavy on this market, the fact is that price will be hard pressed to rise for any great length of time. It is now a situation where the ones that bought at the lows have to figure out if this is a pullback, or a resumption of the trend. History dictates that more often than not, the trend remains intact. It is from this perch that we look at the markets now.
While there is no 100% accurate way to predict price movements, the fact is that this market has been bearish for some time now. True, someday it will change trends, but the underlying fundamentals in this commodity haven’t changed at all. Because of this, to think that the natural gas markets were suddenly going to be the place to go long was wishful thinking.
The breaking of the daily low for Tuesday has this pair looking for the lows again. We are adding to our short position when this happens, and will also sell rallies that show weak candles on the hourly chart. We simply will not buy this market, as the trend has been so obvious.
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Originally posted here
