Natural Gas Rebound Looms as Commercial Hedgers Signal Bottoming Out
The latest data from VT Markets shows that commercial hedgers are positioning themselves for a potential rebound in natural gas prices. The Commercial COT Index has reached 100% for natural gas, indicating that large speculators have pushed their net short positions to extreme levels of -219,767 contracts.
Historically, such extreme commercial buying signals that the market is bottoming out. With global liquefied natural gas demand projected to grow by 5% annually over the coming years, traders should be on the lookout for a sharp short squeeze if prices begin to stabilize around key support levels in the next few weeks.
Another area of interest is the Japanese Yen, which has seen a sudden surge in speculative net longs. The commercial index has dropped to 0%, signaling an overcrowded bullish trade that may precede a near-term correction.