The SMC Report – Natural Gas

April 15, 2019 9:07 pm
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This Week’s Market Comments:

In our seasonal approach to the market, we break the year down into 4 seasonal periods.   We consider than we have now concluded the final decline phase of the January-March winter period due to the inability for the market to continue the decline last week beyond $2.632.  As such, we have laid out expectations for April-June pre-summer market movement and those reading this may contact us to see such expectations a sample our work.

As to where we are, as mentioned above, the market failed to extend any lower last week, but it also failed to quite break above the $2.733 that we had set as a signal that at upside reversal had occurred.  We consider what we have is a case where the fundamental trend in storage is not at all conducive for recovery despite the very strong seasonal tendency for such a 1st pre-summer recovery to be well underway by mid April.  Basically, we have had good improvements in the year-over-year storage situation the past 2-weeks, and the improvement in the 2 upcoming weeks is looking to be extremely large.  Thus, our seasonal tendency for a 1st recovery move is bucking a very strong head wind and the best it has been able to do towards our $2.80’s target was $2.729 last week before dropping back.

Our take on all this, is that unless the market can break above $2.729 in the next couple of weeks, we may only be able to point to some sideways consolidation on the chart as being all that could be obtained on a 1st recovery phase.

As to the coming week, the NYMEX natural gas futures market is currently resting 4/10’s of a cent below the previous week at $2.66 after a week where it continued its recent pattern of trying the upside early in the week and then falling back late in the week.  This makes 3-weeks where the market closed between $2.66 and $2.664 and has accordingly represented 2-weeks of sideways consolidation.  With fundamentals still trending very bearishly, but seasonal tendencies favoring recovery movement during April, we are inclined to look for our 2-week period of consolidation movement to continue.

Much more detail on projected price level and timing of market movement for our entire January-March winter season is included in our weekly SMC Natural Gas publication.  Our publication can be sampled by contacting (501) 240-6700 or SMCnatgas@aol.com.

Bio of SMC natural gas advisory service:

SMC is registered with the Commodity Futures Trading Commission ("CFTC") as a Commodity Trading Advisor ("CTA"), and as such, it has had the ability to trade speculatively for others and to provide advice to outside entities in regard to movement in NYMEX natural gas futures.  At this time, SMC is solely engaged in the latter activity.  SMC was incorporated in 1988 and business endeavors have included founding, growing, and selling a natural gas marketing company, speculative futures trading, and, since 2003, a natural gas futures advisory service specializing in upcoming market movement. 

 

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This post was written by Louis Rose