The extended Independence Day holiday weekend for the United States carried into the Monday session, so volume of course would have been rather thin. That being said, the market continues to look very extended, so at the very least we are probably going to see a bit of consolidation, but it is worth noting that the market has recently broken out to the upside, clearing the $3.40 level. If you take the “measured move” from the consolidation area, it is possible that we could go as high as $4.40 above.
NATGAS Video 06.07.21
Keep in mind that a lot of this has been driven by the overall “commodity move”, which of course has been very bullish. That being said, the market is of course very susceptible to massive selloff due to the fact that we are overextended, and of course the fact that the heat wave has subsided a bit could weigh upon that. However, at the same time we also have tropical storm/hurricane issues, so that could come into play as well.
All things been equal, this is a market that is still extraordinarily oversupplied from a longer-term standpoint, so I think that the rise will be met by massive selling sooner or later, which would move just as quickly. For that matter, if and when we do finally break down, it is likely that we could drop all the way down towards the $2.75 level to fill that gap that has yet to be tested. Because of this, I think short-term is bullish, but longer-term there will almost certainly be great opportunities to short this market.
For a look at all of today’s economic events, check out our economic calendar.