Natural Gas futures on the Nymex had a volatile week before closing 3% higher than the previous one at $4.69. EIA confirmed on Thursday a rather bullish build of only 20 Bcf in working underground stocks for the week ended Aug. 27. Total inventory reached 2,871 Bcf, 16.8% lower y/y, 7.2% below the 5-year average. Both percentages have been looking steady and it seemed like we would be heading for a shallow start of the new withdrawal season later in November.
We were looking for higher highs on this seasonal uptrend and Hurricane Ida offered just that. The right thing to do here was to stick with the near term charts and short sell the supply recovery on exhaustion, while more than 700,000 customers across the Lower 48 still remained without power.
Surgical accuracy is needed as the Daily MACD crossed bullish days ago and it was offering positive momentum. We anticipated the change of direction last May and the market has already offered us more than 50% in real-time trading. We still have the fundamentals in mind so we remain wary about this season's uptrend.
We wanted to identify a seasonal ceiling. Was it too soon? It was, but any pricing above $4.80 will only make us feel contempt. We didn't want to become too greedy over this idea. The January contract was already trading at $4.90 on large volumes. Utilities will soon be looking for affordable alternative sources.
The gas-fired electricity generation market is very important for American producers. Many large corporations are now looking for a hybrid model for their employees; too many of them will continue working from home. Much of the office, commercial building, and industrial demand will not come back anytime soon.
U.S. macro data and the dollar index are to be routinely monitored. Latest labor figures did not look too optimistic either about the pace of the economic recovery. Inflation was already looking threatening.
Daily, 4hour, 15min MACD and RSI are pointing to entry areas. 