Natural gas prices could be bottoming.
From October 9th, 2023, when prices in futures traded at 3.325 until February 20, 2024, when prices troughed at 1.60, natural gas prices fell nearly 60%.
Plus, nat gas is at the lowest price level in 4 years.
Clearly, in the calculations for assessing inflation, cheap gas prices have helped the overall market and have helped the statisticians to declare inflation is busted.
However, not so fast.
The spot-month or April contract shows price sitting just shy of clearing the 50-DMA or 1.88.
Should the moving average clear and confirm, NGJ24 can move up to 1.95.
The real fun begins over 2.00-2.10.
What about UNG, the ETF?
The price on the UNG chart is not near the 50-DMA as it is on the futures chart. This is why we always recommend you watch the underlying commodity to the ETF.
Secondly, right now and quite interestingly, UNG is performing on par with the benchmark or the SPY.
The Real Motion shows that momentum is in a bullish divergence to price as it nears both the 50 and 200-DMAs.
Furthermore, the spread between the 2 MAs is super narrow compared to the spread between the 2 MAs on price.
If we see the futures lead above the 50-DMA as mentioned, then the risk to the recent lows becomes clear and manageable.
ETF Summary
- S&P 500 (SPY) 500 support 510 resistance
- Russell 2000 (IWM) 195 support 205 to clear
- Dow (DIA) 385 pivotal
- Nasdaq (QQQ) 430 support
- Regional banks (KRE) Back to the 45-50 range
- Semiconductors (SMH) 200 support
- Transportation (IYT) 276 should hold
- Biotechnology (IBB) Looking at 140-142 next levels to clear
- Retail (XRT) 75.50 2023 high cleared, now needs to hold
- iShares iBoxx Hi Yd Cor Bond ETF (HYG) 77 big number to hold