The price decline took prices down to levels not seen since last December before finding some support. If you are a long time subscriber, you are well aware that I don’t participate in the expiration trade and very rarely work the upcoming prompt (in this case it is the June contract). I will be watching the spread between expiring May and upcoming June prompt over the next two days. Will update over the weekend and define thoughts in the Weekly section on Monday.
Major Support: $2.97, $2.727, $2.648, Minor Support : Major Resistance: $3.16, $3.628, $3.86, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.03
June is trading a slight $.13 premium to the expiring May contract (Monday) and I will not be chasing it. Depending on how the prompt trades in the last three days of life, any position in June will be beyond my risk tolerance.
Major Support: $2.97, $2.727, $2.648, Minor Support : Major Resistance: $3.16, $3.628, $3.86, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.03
The trade low from yesterday was below the low from earlier in the year as prices fell below $2.99 for a few trades. The question now is how low with the bears take the market. Similar to 2020, the Q1 low was briefly broken in April before prices rebounded. Not convinced the market signals are the same a 2020 as we were going through an over supplied bias then. Six consecutive down trading days is starting to leave some over sold indicators. Selling should carry tight stops.
Major Support: $3.336, $3.16-$3.11-$2.97, $2.727, $2.648, Minor Support : Major Resistance: $3.628, $3.86, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.03
Spoke about the market last week and the small extension to the declines in the Weekly section. Will be keeping the Daily short as just got back from a holiday dinner. Key is the challenge developing to close the gap in the early Sunday night trade and discussed the outcome of early move on Sunday night during the trade on Monday. Still sitting on the sidelines for a confirming technical move to define bias near term. This slow decline in prices still has not countered the bullish bias long term and seems to be a move to test support.
Major Support: $3.336, $3.16-$3.11-$2.97, $2.727, $2.648, Minor Support : Major Resistance: $3.628, $3.86, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.03
Due to an Easter celebrations — the Weekly and Daily sections of the website will be short in length. Last week provided little resolve to the previous week’s dilemma regarding bias but it was interesting to watch a lower low each of the trade days (technically a negative bias) but the open interest continued to decline each day (non-supportive of a bearish bias). Discussed here several times that volume is the energy that drives price trends and having declining volume levels last week sends a warning flag. There was not break down in prices but rather what I would characterize as a slow melt. At the end on Thursday (Friday – market was closed) there had been little resolution as to the bias for this upcoming week. The market did seem to hint at testing the $3.168-$3.11 gap in the Daily Continuous, but even if it opens down in the gap on Sunday night — the trend has been over the last few weeks, that what ever direction is established in Sunday night trade — the Monday full trading day reverses. Caution is advised.
Major Support: $3.336, $3.16-$3.11-$2.97, $2.727, $2.648, Minor Support : Major Resistance: $3.628, $3.86, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.03
The small range for prices (since the extraordinary range expansion last week) gives limited ability to drive returns other than the options market. Take what the market gives you– yesterday, did not even test the mid-term support area of $3.16 — be patient.
Major Support: $3.16-$2.97, $2.727, $2.648, Minor Support : Major Resistance: $3.60, $3.86, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.03
Prices started strong early testing resistance but then spent the day melting down to major support. Mentioned yesterday this is an “unstable” market and I will sit on the sidelines currently.
Major Support: $3.16-$2.97, $2.727, $2.648, Minor Support : $3.336 Major Resistance: $3.60, $3.86, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.03
Spoke last week about the expectations of a test of support at the zone around $3.68 — well that happened quickly and prices extended into the next support zone in the $3.30s before finding some footing associated with the enormous rally in all the markets (most importantly crude) after the early weakness. Associated with the volatile week was a massive liquidation of open interest, 58,210 contracts on Tuesday alone during the suggesting that there some disappointed longs, which triggered the necessary volume. From there the next area of support mentioned in the Daily was the target between support at $3.250 – $3.300 — the May contract could not fulfill that expectation. After trading as low as $3.336 May reversed higher to close at $3.816 (some would consider a solid reversal). It is not normal technical analysis, but a sudden switch from “risk off” to “risk on” resulting from events unrelated to natural gas was the trigger for the substantial high volume reversal. Crude reversed along with natural gas to trade nearly an $8 range, gold nearly $125, bitcoin nearly $9000 with similar volatile gains in risk assets across the spectrum.
Such events are unpredictable and are usually unwound, but are also often consequential. In the case of gas, the reversal traded with 1,122,556 contracts and further liquidation of 44,450 contracts of open interest as participants with short positions were whipsawed out of the previously falling market. Between the two events (the liquidation of long positions on Tuesday and short positions on Wednesday) total open interest was reduced nearly 100,000 contracts and another 30,000 on Thursday. There are not a lot of comparable wholesale liquidations that match those few days.
As a trader I love volatility and being the chance to take positions — looking for reward. Last week was out of my comfort zone but somewhat profitable. Discuss in detail the events of the week in the Weekly section but suffice to say being short from the previous week’s close was great until Wednesday (thanks for stops). Then price whipped around to destroy the folks that don’t use stops only to destroy the folks who came in long (with crude and other commodities) by sell off more at the end of the week. I am going to label last week as volatility based on non-gas issues and sit on the sidelines until definable risk and reward returns to the gas market.
Major Support: $$3.33, $3.16-$2.97, $2.727, $2.648, Minor Support : Major Resistance: $3.628, $3.86, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.03
