We published, “Picking a Bottom in Natural Gas” on January 15th. The recent decoupling of the declining energy sector from the broader stock market is nurturing the seeds of future growth in the economy as a whole. This is providing early buyers in natural gas futures with some hope that as the energy and stock markets have decoupled so too will natural gas from the broader energy sector.
Monday began with an official COT Sell signal in the U.S. Dollar Index that we published in TraderPlanet. This trade was actually a follow up to the previous week’s piece also published in TraderPlanet.
We combined these into one post including the annotated US Dollar Index chart in – The USD Index – A Speculative Bull Trap?
The natural gas futures market was trading above $5 per mm/btu one year ago. This was boosted in large part by one of the coldest winters on record. Frankly, the news in natural gas since then has been nothing but bad as a mild summer limited cooling demands and the still temperate winter has brought more of the same. Furthermore, the sharp drop in oil prices along with a growing supply glut have also combined to send prices to multi-year lows. Several bearish factors have beaten the market down 50% from last year’s high. In fact, the gravity of the market has finally forced it to fall below the technical support on the chart below that had built up since the market last bottomed in 2012. However, all is not lost.