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Declines Extended on Demand Gains?

Daily Continuous

Daily Continuous

Major Support: $2.658, $2.587-$2.522, $2.495

Minor Support: $2.596

Major Resistance: $2.75, $2.813, $2.892-$2.903, $2.94-$2.945, $2.998,

Minor Resistance: $3.074, $3.153

Yesterday was quite a surprise for this trader— I come in and see that some of the model showed a demand increase in the 15 day period and prices are down?  I must admit, that caught my surprise as some longer range forecast have not been updated yet. As a client responded to me in the morning “when prices don’t go up on good news — they are headed down” and that is clearly the direction that this market is committed too at this point. The short Jan traders have rolled forward to Feb or, as indicated by recent declines in Open Interest, monetized their profits. Most of you know, I was expecting a brief short rally into the expiration period due the light trade but the slight gains on Monday were not enough to force a scramble.  Here we sit with storage release which will be below last year’s but around a 170 withdrawal above the 5 year average. Good luck identifying where price go —all I have to say, is that the long term support at $2.522 is a solid number right now but on the upside — it is anyone’s guess but the old support around $2.75 (which now is resistance) has held recently. From there, the $2.85-$2.89 are will find sellers. Due to commitments, there will be no Daily for Friday so let me take this opportunity to wish you all a very Merry Christmas and if you do not celebrate that—— a wonderful Holiday season— the next Daily will be on the morning of Wed Dec 27th, just in time for expiration.

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