Big Gap Open Only to Fail

Weekly Continuous

Follow through buying took the prompt to $7.058 before a reversal lower. Another one on Tuesday in the opposite direction set the week’s high at $7.105 testing the resistance from the intersection of the 20 – week SMA and the still rising 40 – week SMA. From those levels, prices immediately retraced and closed the gap from Monday and closed the week in the middle of the range.

The results left prompt January $.355 higher, but examination of individual monthly gains in the winter prices, showed an interesting divergence. Weekly gains of February were over $.20 except for March. Sandwiched between February’s + $.221 and April’s +$.229 was March at +$.037. Chances are (guesses really) are that difference was a result of substantial buying of January and February while simultaneously selling March– sometimes referred to as a near – term bull spread. Building length in the remaining winter while offsetting that length in March. With strong volume in that spreading would indicate that folks are expecting additional winter strength in early 2023.

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