Jan Natural Gas: Natural gas prices ended sharply lower on Monday fueled by a Gap down on the week and break of the daily uptrend line. The market closed down 12.3 cents at 3461, its worst levels of the day. The outlook remains Bearish heading into Tuesday's session with another Gap down expected as of 730am. Trade above 3490 Pivot will neutralize the Bears.

Off the pit open we will sell rallies against 3444-3461 R1 Resistance, stops above 3475 suggested. Failures against R1 reinforces the Bearish outlook and guns for 3400 S1 Support initially. Trade below 3400 clears the way to 3360-3350 S2 Swing low support zone. Continue to sell rallies against 3400 from here, Stops above 3415 while targeting the 2011 lows at 3300-3285 S3 Support and potentially lower to 3255 S4 lower target.

On the upside, buyers can trade Long on and test and hold basis only against listed Support zones, Stops suggested 1.5 cents below each respective zone. Cover most Longs against 3444-3461 R1. A flip above 3461 spurs a quick bout of short covering to 3490 R2 Pivot Resistance, but only trade above 3490 will neutralize the Bear Bias. A break through 3490 calls for sustainable short cover rallies to 3521-3541 R3 to 3572-3584 R4 upper Resistance targets.

Daily Chart:

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