Natural gas has been on our watch list since the beginning of the year, and I became more constructive on the asset on June 3, 2010 prior to a 20% plus move. Today we find natural gas, as represented by the i-Path DJ-UBS Natural Gas Total Return Sub Index Exchange Traded Notes (symbol: GAZ), having pulled back considerably and bouncing off support levels we identified 6 weeks ago.

Figure 1 is a weekly chart of GAZ, an ETN that trades on average 200,000 shares per day. Key pivots or areas of support and resistance are identified on the chart. After making today's low at 9.68, GAZ shot up about 5% in the next hour. In other words, buying came in at support. Support remains at 9.74 (which is good enough for government work). Resistance is at 11.51, and a weekly close over this level would seal the deal for a new bull market in natural gas. A weekly close below 9.74 suggests lower prices.

Figure 1. GAZ/ weekly