Gasoline futures have been falling since late July, and the decline has accelerated in the past few weeks. So can gas fall more? You bet it can.
As we move into the fourth quarter, we are entering the lowest period for gas demand, seasonally speaking. In fact, demand last week alone fell by 180,000 barrels.
Going back over the past few years, the charts tell a clear story: year after year, prices have declined into the winter. There is now a real possibility that we could see $3.40 to $3.50 on the spot contract very soon.
(Read more: Relief at the pump! US gas prices drop 6 cents a gallon)
And it's not just seasonal demand that could drive gas lower. We also have the contentious debt ceiling debate, which could lead to a government shutdown that would leave thousands of government workers idle.
In addition, recent economic numbers such as durable goods and consumer confidence are showing some weakness in the overall economy.
Finally, the Middle East is quieting down, taking the geopolitical premium out of crude oil, and gasoline alongside it.
(Read more: Crude holds gains after US oil inventories surge)
So how am I trading gas right now? I am looking to sell rallies in gasoline at the $3.70 to $3.75 levels. And I won't be a buyer until we near the end of the quarter.