Natural Gas Fundamental Analysis March 15, 2012, Forecast

Analysis and Recommendations:

Natural Gas is holding at 2.2830 after opening today at 2.3260. Gas is just sitting waiting for inventory releases and the rough up and downs today have been traders positioning themselves. March has been a very mild month and winter is almost over. Inventory levels will determine how low the bottom will be. We are expecting it to sit somewhere around 2.32 the opening of today

 

 

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Natural Gas Forecast March 14, 2012, Technical Analysis

The natural gas markets rose during the session on Tuesday as the floor at $2.20 continues to support the market. The area may have attracted value investors as the market dipped to ten year lows. However, the other and more important possibility is that the bears have simply been taking profits for the session. 

The resulting candle for the day is a hammer, and this shows that we may see a bit of a bounce from this point. This has us interested in selling on signs of weakness as there is absolutely no real suggestion of a potential trend reversal, and the warming weather in the United States certainly won’t help prices either. The spring is almost here, and as a result the gas usage by the general public will decline. The industrial use will be by far the main driver of pricing in the near term.

The economy in the US does seem to be picking up, but it is still fairly weak, and as such we aren’t looking for a massive amount of demand to suddenly enter the market. The supply of natural gas in the US alone continues to be massive, and with new discoveries on an almost daily basis, there is no shortage of natural gas in the foreseeable future.

The $2.20 level looks as if it is a “last stand” of sorts by the bulls, and one can also make a case for levels at every 20 cents in this pair going all the way to roughly $3.20 or so. This allows for easy plotting of support and resistance in this market. It is because of this that we are looking to sell this market on weak candles in intervals of 20 cents. We think that a bounce is long overdue, and welcome it as a way to sell at higher prices as the trend certainly isn’t changing, and the demand picture will only get worse in the United States, which is the largest consumer of natural gas in the world. With all of this in mind, we simply wait to see a weak closing candle on the daily chart at one of our “20” levels to sell again. 

Natural Gas Forecast March 14, 2012, Technical Analysis
Natural Gas Forecast March 14, 2012, Technical Analysis

Natural Gas Fundamental Analysis March 14, 2012, Forecast

Analysis and Recommendation:

Natural Gas has surpassed the 10 year low it reached earlier, now trading at 2.221 after falling to a low of 2.208. Winter is over and there is no demand for NG and not even a slim chance at this point of a later winter storm. Inventories are due later on Wednesday and are expected to be high for this time of year and NG should end up sitting here for a while.

 

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Natural Gas Forecast March 13, 2012, Technical Analysis

The natural gas markets fell slightly during the Monday session as traders continued to pressure prices in this commodity. The fundamental picture for natural gas is extremely ugly, as there is far too much of it to command any pricing power from the suppliers. The trend is most decidedly down, and there is nothing on this chart that leads us to believe that it is going to change anytime soon.

The $2.20 level looks to be supportive at this time, and as such we think that a bounce could be coming. However, this will only be a chance to sell this market at higher prices. The gap from a couple of weekends ago should be resistive, as will the $2.60, $2.80, and $3 levels. We are selling rallies as they come, looking for signs of weakness on short time frames.

Natural Gas Forecast March 13, 2012, Technical Analysis
Natural Gas Forecast March 13, 2012, Technical Analysis

Natural Gas Fundamental Analysis March 13, 2012, Forecast

Analysis and Recommendations:

Natural Gas dropped to a 10 year low in todays session, edging back up to  trade at 2.264 after falling to 2.236. As winter draws to a close NG is going to find a place to hibernate for the season. Once inventories are released later this week, Natural Gas will find a holding point and stay within a tight channel. If inventories are as high as expected we will see NG stay in this range, if inventories are slightly better we will see the new bottom at 2.32.

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Natural Gas Forecast March 12, 2012, Technical Analysis

The natural gas markets rose during the Friday session as the market starts to look like it wants to base at this point. While a trend change is a real stretch of the imagination, this recent action looks rather supportive, and the gap from the weekend looks as if it could be filled. The trend is obviously down, and the bounce that could be coming will only offer more selling opportunities for us. We see this gap as a great place to sell, and the fact that the $2.50 level is in the center of it helps us look for selling opportunities.

The buying of this market is far too risky for us to consider, and because of this we are not even thinking about it. The market should also see resistance at the $2.50, $2.60, and $2.80 levels as well, and all of these areas could be selling points for us if we get weak candles.

Natural Gas Forecast March 12, 2012, Technical Analysis
Natural Gas Forecast March 12, 2012, Technical Analysis

Natural Gas Forecast for the Week of March 12, 2012, Technical Analysis

The natural gas markets started out the week by gapping down to continue the massive fall in price. This overly bearish signal came after a triangle had been broken to the downside as well, and this was enough to push more and more selling during the 5 sessions. However, by the end of the week, we saw a bit of a bounce in this contract that printed a hammer.

The hammer in and of itself is a bullish sign. None the less, we are not taking any bullish signals at the moment as the market is decidedly bearish, and it would take a massive bounce to change the attitude of the marketplace. The market would have to get back over the last major collapse, and that is all the way back to $4.50 – in other words double in value.

While there is simply far too much natural gas for the demand out there, we see no real reason to think that the market will continue to rise over the long run. The trend is massive, and only fools step in front of a chart like this. We also see the gap from the open this past week looks like it could fight the bulls, and then there is the triangle, which should continue to offer resistance as it was once so massive in its support of the market.

Because of this, we look at these bullish candles with suspicion, and quite frankly – this has served us well over the last year. Every time the market has bounced over this time period, selling rallies was a very profitable strategy. We don’t see any reason to think this is going to change in the near term.

The $2.50 level is the top of the gap, and we are looking for signs of weakness there. If we don’t get it, we are more than happy to wait for weakness at higher levels such as the $2.75 and $3 areas. Quite frankly, the higher this market bounces, the happier we are to sell it as it allows for greater profits. We will not buy under any circumstances. 

Natural Gas Forecast for the Week of March 12, 2012, Technical Analysis
Natural Gas Forecast for the Week of March 12, 2012, Technical Analysis

Natural Gas Weekly Fundamental Analysis March 12-16, 2012, Forecast

Rule: Natural gas is nevertheless a major commodity in its own right, which is used for everything from cooking food to heating houses during the winter. Natural Gas is growing much faster than either of its non-renewable fossil fuel competitors, oil and coal.

Do not miss the weekly U.S. gas inventories report. The figures are issued by the Energy Information Administration (EIA) every Thursday afternoon at 15:30 (released Friday at 15:30 if there was a U.S. bank holiday on Monday). Here’s a link to the latest EIA report. The main natural gas moving figure in there is the change in inventories from the previous week. When it comes to the gas inventories report, we’re talking about billions of cubic feet, Bcf for short.

When the actual change in inventories number is released, it is the deviation from the expected number that is really important. If the actual inventories figure shows a 24 Bcf rise when an 84 Bcf increase was expected, then that is actually positive for the price of natural gas. All else equal, the price of natural gas should rise after the release.

A barrel of oil has roughly 6 times the energy content of natural gas. If the fuels were perfect substitutes, oil prices would tend to be about 6 times natural gas prices. However, due to various market characteristics discussed briefly above and the ease of using oil, the price of oil has been following a pattern of 8-12 times that of natural gas. However that ratio has spiked dramatically since March 2009.

Analysis and Recommendation:

Natural Gas is ended the week at 2.3175 after falling as low as 2.22. Natural Gas hit a 10 year low earlier this week. As winter draws to a close there is nowhere for oil to go. Inventories remain high for the end of the season with little demand. There is nothing doing here.

 

 

 

 

Historical:

High      5.13 January 2011

Low       2.22 March 8, 2012

 

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Natural Gas Fundamental Analysis March 12, 2012, Forecast

Analysis and Recommendations:

Natural Gas  moved back up today, after falling all week to close yesterday at 2.295 and is currently holding at 2.308. There is a strong line of support at the 2.30 level and again at the 2.323 level. Natural Gas will most likely sit in this range for a while. Winter is over and there is little demand and inventories remain high.

 

 

 

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Natural Gas Forecast March 9, 2012, Technical Analysis

 

Natural gas markets fell most of the day on Thursday, but got a small bounce in the end to form a hammer. The candle suggests that perhaps we are getting ready to see a bounce in this market, but we simply cannot look at this as a buy signal. Instead, we see it as a warning that we need to be paying attention to the market for signs of weakness after a bounce. After all, we simply cannot buy a market that is so unequivocally broken down.

The $2 level is still calling us, and we think that if we get the bounce from here, we are likely to see resistance at the gap from the weekend, and also from the $2.60 level. Both of those would make great places to see weak daily candles in order for us to sell. The breaking below of the hammer is also a strong sell signal, and one we wouldn’t hesitate to take as well. The breakdown would show renewed bearishness by the market, and almost certainly have to open the door to our $2 target at that point.

However, we actually prefer to see a bounce as it will give us a higher level from which to sell. The conviction in which the sellers have been showing is simply far too strong to consider looking at the market in any other way. While it is true that the market will eventually turn around someday, that day is far from now if you understand exactly how much natural gas is ready in the marketplace at the moment.

The United State has over 14 trillion cubic feet of it, and Canada has something along the lines of another 7 trillion, making the “need” for natural gas rather small in comparison. This massively imbalance would continue going forward, and as a result we think this trend still has quite a bit of legs to it still. Selling rallies and new lows has served us well for months, and we suspect it will for the foreseeable future also.

Natural Gas Forecast March 9, 2012, Technical Analysis
Natural Gas Forecast March 9, 2012, Technical Analysis

Natural Gas Fundamental Analysis March 9, 2012, Forecast

Analysis and Recommendations:

Natural Gas dropped to 10-year lows after a supplies report showed a lower-than-expected weekly decline. Natural gas dropped over 4 cents, or 2.0%, to $2.256. It had traded around $2.41 before the report. The Energy Information Administration reported a decline of 80 billion cubic feet for the week ended March 2. Analysts polled by Platts had expected declines between 82 bcf and 86 bcf for the week.  Natural Gas has been falling steadily looking for a bottom as winter comes to an end.

The U.S. Energy Information Administration’s weekly report showed that natural gas storage in the U.S. in the week ended March 2 fell by 80 billion cubic feet, after declining by 82 billion cubic feet in the preceding week. Analysts had expected U.S. natural gas storage to drop by 86 billion cubic feet. 

Inventories fell by 63 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 92 billion cubic feet, according to U.S. Energy Department data.

Total U.S. natural gas storage stood at 2.433 trillion cubic feet as of last week. Stocks were 739 billion cubic feet higher than last year at this time and 792 billion cubic feet above the five-year average of 1.641 trillion cubic feet for this time of year. (from the EIA statement )

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Natural Gas Forecast March 8, 2012, Technical Analysis

Natural gas markets continued to look very weak during the Wednesday session as the market fell yet again. The recent breakdown of the massive symmetrical triangle was “60 cents tall”, and as such gives us an implied target of $2 in this market. There is absolutely nothing on this chart that suggests otherwise, and to be honest – $2 will more than likely only be a pause in this decline. The $1 mark is one a lot of analysts are calling for now, and we tend to believe them. We sell rallies on signs of weakness, and never, ever buy this contract.

Natural Gas Forecast March 8, 2012, Technical Analysis
Natural Gas Forecast March 8, 2012, Technical Analysis

 

Natural Gas Fundamental Analysis March 8, 2012, Forecast

Analysis and Recommendations:

Natural Gas continues to fall trading at 2.306 down from 2.348. Weather forecasts continue to call for a warmer March then predicted and with just a few more days left of winter the demand for Gas is gone for the season. Inventories continue to remain high. Gas should sit in this range for quite a long while, regardless of production cuts, as consumption is quite low.

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Natural Gas Forecast March 7, 2012, Technical Analysis

The natural gas markets had a fairly quiet session on Tuesday as the market continues to consolidate in this area. It should be known that there were reports of increased demand, and fewer drillers operating in the future, but even this wouldn’t push prices up for any real length of time. In fact, the action was bullish at first, but faded away towards the end of the session. The market looks like it will continue lower, and as such we are selling this market on any type of rally or when it breaks lower. Buying cannot be done under any circumstances.

Natural Gas Forecast March 7, 2012, Technical Analysis
Natural Gas Forecast March 7, 2012, Technical Analysis

Natural Gas Fundamental Analysis March 7, 2012, Forecast

Analysis and Recommendations:

Natural Gas is trading at 2.349, opening at 2.352, market talk pushed NG up a bit in mid day trading and buyers were trying to pick up a bargain, with prices plunging so quickly. Natural gas prices lost 5.2% on Monday to settle at USD2.348. But prices regained modest strength as traders covered short positions only to fall again later in the day. With 16 days left of winter, warmer than average weather and over stocks in inventory, Gas will continue to fall to the earlier low of 2.32 and sit tight.

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Natural Gas Forecast March 6, 2012, Technical Analysis

The natural gas markets have been overly bearish for the last year or so, and the trend looks as if it is picking back up again. The supply in the gas markets is far too large for the demand to take it all in, and as such there is little hope of the market rising for any significant amount of time. The increasing concerns over Middle Eastern troubles also has started to kick in the conversation in America about utilizing more of the country’s massive 14 trillion cubic feet of natural gas reserves as it is so abundant, cheap, and much more secure than oil supply from places like the Persian Gulf.

Recently, we saw a bit of an attempt to rally this market, and formed a symmetrical triangle. The triangle broke a week ago, and now we use the height of that triangle to project the move down. Based upon that triangle, we are expecting to see natural gas hit the $2 mark before too long, and it is through this prism that we look at the markets for our trades.

The gap down for the session on Monday is a massive signal to sell yet again, even though the market is massively oversold at this point. Of course, in the more near-term, we see the recent consolidation as the rest before the continued fall, and this gap certainly does nothing to dissuade us from selling more. In fact, we will continue to add to the short position until we get to the $2 mark.

The rallies going forward will only add to our positions as it allows us to sell more at a higher price. The market can’t be bought as there is simply far too much in the way of bad news for the natural gas markets to rise over time, as the new technologies allow gas drilling in places that previously weren’t possible. With this in mind, we are selling any and all rallies and new lows. The gap from the start of Monday should now be resistance as well, as this trend continues.

Natural Gas Forecast March 6, 2012, Technical Analysis
Natural Gas Forecast March 6, 2012, Technical Analysis

Natural Gas Fundamental Analysis March 6, 2012, Forecast

Analysis and Recommendations:

Natural Gas  has dropped to 2.357 falling almost .05 today. Natural Gas, bottomed, falling as low as 2.352 opening at 2.401. NG has dropped from the high of 2.807 just two weeks ago. Natural Gas is right back where it started on February 1, 2012, when the markets started to inflate.

It is very rare that the FXEmpire team hits a home run, we usually make it to first base, often hit a groundball double, sometime a solid 3 bagger, but an out of the park homerun is unusual. Our overall goal is to provide our readers with accurate information and forecasts, without predicting the markets. The FXEmpire team analyzes data and fundamental information, so that our readers, that do trade have valuable non biased information. Over the past few weeks we have continued to review our analysis and have predicted that Natural Gas will plummet seeking a bottom in the 2.36 range. Since February 29th, we have been forewarning our readers that this drop was coming, We have been continuously informed our visitors that there were no real reasons to support the upswing in Natural Gas and as it climbed near the 2.80 level, our team published an article saying that this was crazy. So every now and then, it is nice to be able to brag and say we called this one right.

 

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The FxEmpire Team Hits A Home Run on Natural Gas

It is very rare that the FxEmpire team hits a home run, we usually make it to first base, often hit a groundball double, sometime a solid 3 bagger, but an out of the park homerun is unusual. Our overall goal is to provide our readers with accurate information and forecasts, without predicting the markets.

The FxEmpire team analyzes data and fundamental information, so that our readers, that do trade have valuable unbiased information. Over the past few weeks we have continued to review our analysis and have predicted that Natural Gas will plummet seeking a bottom in the 2.36 range. Since February 21th, we have been forewarning our readers that this drop was coming, We have been continuously informing our visitors that there were no real reasons to support the upswing in Natural Gas and as it climbed near the 2.80 level, our team published an article saying that this was crazy. So every now and then, it is nice to be able to brag and say we called this one right.

Today, Natural Gas, bottomed, falling to 2.365 opening at 2.401. NG has dropped from the high of 2.807 just two weeks ago. Natural Gas is right back where it started on February 1, 2012, when the markets started to inflate.

Natural Gas Monthly Fundamental Forecast March 2012

This over production, without new uses or demands has increased inventories and pushed Natural Gas prices below estimates and projections. Natural Gas hit a bottom in February of 2.32 but moved back up to 2.80 on unimportant news and predictions of cold weather, and then begin to fall back down to find a bottom. NG as is trading around 2.47 at present and will most likely fall to the 2.42 number in March and then drop again when winter is officially over.

Natural Gas Weekly Fundamental Analysis March 5-9, 2012, Forecast

Natural Gas  is down for the week at 2.466. Natural Gas continues to fall, with excess inventory and fewer days of winter. NG should slowly continue to fall throughout the week, possibly find a near bottom at 2.40

Natural Gas Fundamental Analysis March 5, 2012, Forecast

Natural Gas stayed in a tight trading range today, closing the day just about where it began. NG is trading currently at 2.482 having opened at 2.481. NG will continue to stay range bound until investors give up and move from their positions, as the winter days move past us, investors are hoping for one last blast of cold to push the prices back up or a news story that will give one last surge before Gas creeps to a bottom and sits there for months to come.

Natural Gas Fundamental Analysis March 2, 2012, Forecast

Natural Gas continues to fall. With excess inventory and winter almost over NG is looking for a place to sit for the next few months. Gas is trading at 2.478 falling from 2.587. Just a few weeks ago gas was hitting a low at 2.32, and is probably where it is headed to now.

Natural Gas Fundamental Analysis March 1, 2012, Forecast

Natural Gas should continue to slowly sink until it finds a bottom.

Natural Gas Weekly Fundamental Analysis February 27 – March 2, 2012, Forecast

Natural Gas ended the week at 2.686 after hitting a high earlier in the week of 2.825. NG has been in the news a good deal lately, with announcements from Chesapeake Energy with their future growth predictions along with news of more use of natural gas in the future and environmentalist concerns in regards to the process used to capture the gas. Inventories this week showed a drop as expected. Weather has been holding and winter is coming to an end along with the possible higher demand for NG. Natural Gas should bottom out over the next month.

Natural Gas Fundamental Analysis February 22, 2012, Forecast

Natural Gas is trading at 2.775 in today’s session as investors pulled profits after NG surged close to 20% in less then two weeks. Earlier in the day Natural Gas hit a high of 2.79, last week NG topped out at 2.81 after moving up from 2.36 earlier this month. Winter days are running short and warm weather is predicted. Gas was seeking a bottom when inventory reports last week showed it below forecast, non the less there is still no reason for NG to continue to climb.

 

Natural Gas Forecast March 5, 2012, Technical Analysis

Natural gas markets rose ever so slightly during the Friday session, yet failed to impress on any level whatsoever. The price action for the session was more indicative of a benign trading session with no real catalyst to push the market than any kind of statement. 

We saw the market break down and out of a triangle a few days ago, and quite frankly would love to see a bounce here so that we can sell more contracts. In the meantime, nothing has changed: We sell bounces and new lows. Buying isn’t even a thought at this point in time as we are aiming for a $2 print before the move is over. 

Natural Gas Forecast March 5, 2012, Technical Analysis
Natural Gas Forecast March 5, 2012, Technical Analysis

Natural Gas Forecast for the Week of March 5, 2012, Technical Analysis

The natural gas markets fell for the week as the downtrend looks set to continue going forward. While the triangle that was broken doesn’t look like much on a weekly chart, it was significant on the daily one and measures for a move down to the next handle, the $2 mark. This is a very logical and reasonable move, and considering it is with the trend – we are inclined to believe the signal.

The oversupply of natural gas is a structural issue, and there is absolutely no end in sight to it. The United State alone is known to have at least 14 trillion cubic feet of natural gas waiting to be drilled, and the storage facilities in the US are absolutely overflowing with the commodity. Canada is known to have about 10 trillion known cubic feet available as well. No matter how you slice it, the market is going to have more than enough supply coming as long as there are people willing to buy it.

In order for the market to turn around, we have so see less drilling. This is starting to happen, but we are a long way away from seeing enough of the participants leave the drilling process in order to have prices rise. There will more than likely have to be a lot of consolidation in the companies that explore and drill for natural gas, and this could take time. It is in this environment that we find ourselves selling this market over and over.

The breakdown from the triangle sent the market down to the $2.40 area, and testing the lows in the area. The breaking of this level to the downside is a very bearish signal and has us selling more natural gas as we look for that above mentioned move to $2. The buying of this contract is absolutely ill advised, and we think that perhaps even the $2 level will merely be a bump along the road. There are many analysts out there calling for $1 prices in the next year or two, and judging by the way this market has behaved, that isn’t a real stretch of the imagination.

Natural Gas Forecast for the Week of March 5, 2012, Technical Analysis
Natural Gas Forecast for the Week of March 5, 2012, Technical Analysis