Lets look at the technical side of trade last week– Lower low testing major support (holds for now) on increasing volume and increasing open interest. That sounds like a market that wants to decline further. The big area is the support zone where trade left last week at $3.00 should it hold then prices may rebound to test breakdown areas at $3.16, $3.25, and $3.32. Further declines will send prices back to the range trade of the late summer ($2.80-$2.64).
Last week’s action was off of bearish weather reports for November but I am not convinced they can get any more bearish and it is likely that weather will change. The bearish start to Q4 prices reminds my of a couple of years ago — but I have to look them up to comment. In the meantime — wanted to have you look at something I wrote to a client last week..
