As you know, I have been expecting some sort of break out based upon technical conditions — but I did not expect that type of run. Taking price up to the highs from My (after hours) only to find selling once again. Have little knowledge as to what prompted this run, (pipeline explosion happened in May) so the folks trading have heard or seen data that wants them to cover short positions. Yesterday’s gains took prices three standard deviations over the 20 week SMA which is not sustainable over time — so the market should consolidate the gains or the market will just collapse into the range as it did last May. The rest of the week is a key time for the market going into winter. Due to the failure of prices to extend beyond the 200 day SMA in the Sept chart there is a clear area of resistance– now we have to define the support zones that will hold the gains.
Yesterday’s gains went above the 200 day SMA (Sept contract) briefly on to retrace some of those gains and then in the post outcry session took prices back above only to retrace. Is the market taking advantage of the rally to re-establish short (per May rally) or is this a sea change.