(MENAFN- Daily Forex)

• The natural gas markets rally to bit during the trading session on Thursday, as we continue to see a lot of noisy behavior.
• This rally looks like an opportunity to me, because I'm more than willing to start shorting if I get the opportunity to do so.
• At the first signs of weakness, I am looking to get short of this market, because the supply of natural gas is going to continue to be more than demand, especially this time of year where we see no heating demand, and unless we have a heat wave, it's unlikely that the natural gas markets will see a massive surge.

Technical Analysis

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The technical analysis for natural gas is obviously very negative, as I have seen this market fall apart over the last couple of months, which you typically will do during the summer season. Rally and from here could open up the possibility of a move to the $3 level, but quite frankly, I would anticipate seeing a lot of resistance between their in the $3.20 area, which now is starting to attract the 50 Day EMA.

If we can break down below the bottom of the last couple of candlesticks, it's likely that the market could drop all the way down to the $2.50 level. All things being equal, the natural gas markets will continue to be very heavy but given enough time I do think that the natural gas market will turn things around due to the fact that sooner or later, we will start to focus on cooler months. We are not there yet, so in the meantime I continue to fade rallies, and I do think that natural gas could end up making a“lower low” from here as well. Further compounding things, it looks like traders are starting to worry about the global economy, so that could wreck demand as well.

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