Seasonal Context and Cyclical Play
As things stand right now, I think we are getting a little stretched to the downside, so I’d look for a rally to start fading again. I’d never buy natural gas this time of year, and even if we do get some type of massive heat wave coming out there, the spike that would show up in the market that shows signs of exhaustion, I’m willing to jump all over, I’m willing to start shorting.
I don’t buy natural gas until we start to get towards the fall, when we’re trading winter contracts. You’ll see a gradual rise in the market, and then, of course, cold weather will cause spikes. This is a market that is very seasonal, very cyclical. That’s all it’s doing, is playing out that same seasonality and cyclicality. Short-term trading is preferred because, quite frankly, big moves are unexpected.
