Why Natural Gas is a Coiled Spring

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Accumulation zone within a narrow range after a 25% drop. In technical analysis, this often means that major players are "vacuuming up" the supply from panicked retail traders, forming a bottom.

Following a sharp decline in early February, a massive amount of short positions has accumulated in the market. Any hint of frost forces these traders to buy back gas to close their trades. This creates a landslide-like price increase.

This is a unique technical moment. The price of gas has fallen over the last 3 days, while the "quality" of the weather over the last 2 days has become much more "bullish." This divergence between meteorological reality and price always closes in favor of the weather.

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