The natural gas markets continued the fall on Wednesday as the pullback over the last few weeks has been repudiated. The market is without a doubt overly bearish, and the bounce of late has simply been a set up to begin selling again. This is exactly what we have done, and hopefully you did too as we pointed out this move a few sessions ago.
The breaking of new lows can be used to either short or add to an existing short position in this market. The trend is massively bearish over the last couple of years, and this hasn’t changed. The $2.50 level has given way, and this leads us to believe that $2 is the next target for sellers. We don’t buy – at all.