While I was writing my last piece, the natural gas futures dipped 10% from the peak, testing $4.123 on Monday.
I had mentioned two scenarios: first was a retest of the turning point, which I pointed out on Monday after the formation of a double bottom that tested the $3.520 level last Friday.
The second scenario was a reversal, after falling 10% on Tuesday.
Natural gas bounced back more than 16% from Friday’s low, with a gap-up opening on Monday, which I had predicted.
On Tuesday, the natural gas futures dipped 6%. I was blamed for the 16% crash, as most of the readers ignored the sudden change in weather outlook on Tuesday from normal to warmer.
However, the prices had started a reversal much above Friday’s low, ensuring that the short squeeze will continue till this weekly closing as the weather could turn cold from Jan. 24 – Jan. 26.
I don’t mind if the readers blame me, as natural gas is the most uncertain commodity in the world. Still, they must judge the movements of the natural gas futures themselves before placing any order, even after the appearance of anyone’s analysis or the news.
I believe price swings will continue till this weekly closing. Thursday will bring some relief for the bulls after the weekly inventory announcement that could continue to impact the natural gas price movements on Friday.
Disclaimer: The author of this analysis does not have any position in Natural Gas futures. Readers are advised to take any position at their own risk, as Natural Gas is one of the most liquid commodities in the world.