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Natural gas futures on the Nymex had a positive week before closing 7.75% higher than the previous one at $4.03. EIA reported on Thursday a rather bearish nonetheless build of 87 Bcf in working underground stocks for the week ended October 17. Total inventory is currently at 3,808 Bcf, 0.9% higher y/y, 4.5% above the 5-year average. 

We have been buying these latest dips again and again, as the market is still showing some range-bound behavior. We want to operate on the 4H charts, buying any momentum from a cheaper price level coming our way on this winter uptrend. The market cannot properly breakout however since last summer so we remain vigilant in identifying this coming seasonal ceiling. The first sessions of the December contract trading in larger volumes are very important as the refill season is going to be prolonged for a few weeks hitting a record 8-month build. Is $4.00 our new $3.00? For this uptrend to continue, new support levels have to be formed at $4.20 and then $4.40, but we might not have that much time ahead of this winter. Any higher pricing could only be in the form of a few spikes until mid-February. So trading the near-term charts is really important to us. At this point, a shorter use of the market from across the board on hedging activity for end-of-year trading does not look too important. This might change in the coming month.

The resilience of the U.S. economy shows that the Fed has been right so far with its interest rate policy. The latest PMIs are spectacular for the U.S. as well as E.U. Allow me to point out how the two markets are obviously linked and make a brief comment on how dependent on one another the two largest economies of the world are. Their trade balances, contrary to what President Trump says, are equal. Products and services together. Also, the foreign direct investments between the two largest markets in the world are balanced. Between Europe and America, therefore, there is no reason for such zeal with tariffs. Greater self-confidence is needed on the part of American leadership. In any case, the reasons for artificial profiteering by the fossil fuel industry should also be addressed by political leadership and regulation as well as building opportunities for other forms of energy. The Fed is not omnipotent. Daily, 4hour, 15min MACD and RSI are pointing to entry areas. 

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