Natural Gas Short Covering Rally

Natural gas is experiencing a classic short covering rally. This is when the shorts take their profits. In a bear market, the open interest decreases and the price increases.

The bottom in natural gas in the beginning of August, coincides with a top in open interest. This is an indication that natural gas maybe experiencing an intermediate top. With a 25% increase in price, it needs a correction. I still have a long position in natural gas, but I reduced my  position and took some profits.