Early strength mentioned in yesterday’s Daily evaporated quickly as the full market opened and forces prices down. Expected, per the Weekly and Daily sections, weakness was expected from the over bought level of the market. Not convinced that the retracement is finished– if you are buying be patient–if you are selling be opportunistic.
Major Support: $4.21-$4.139,$4.122,$4.055, Minor Support : $3.942, $3.75,$3.65 Major Resistance: $4.394, $4.461-$4.475, $$4.901,
Last week’s gains extended the run that started with the premium afforded the December contract. Total open interest had increased substantially (86,824 contracts over five trading days) while November faded from a 10/08 high at $3.550 to a 10/16 low of $2.922, likely due to aggressive speculative short selling. In the recent weeks prompt gas has closed higher in 10 of 15 trading days with a notable contribution from December’s premium over expired November ($.439), has traded almost $1.50 higher.
December would fail at well – defined resistance provided by the trend line declining from its March – June highs and its declining 20 week SMA. It didn’t. A trend line and moving average violation like that is a serious technical positive. Mentioned it at times during Oct with the Nov contract, but did not occur. During the rally from that above referenced October low open interest has fallen from 1,721,787 contracts to 1,556,062…165,725 (through the 11/06 close, open interest statistics lag one day), 75,982 of that during the five days ending 11/06. Over the sixteen trading days since the peak of open interest the total has fallen in all but one day. To this analyst this is a great example of a short covering run in prices.
Strength continues in the Dec trade but now has become a little over extended on the bullish side as discussed in the Weekly Section. Would expect some retracement of prices in the near term– but from where the technical data points don’t show any except the resistance areas discussed.
Major Support: $4.21-$4.139,$4.122,$4.055, Minor Support : $3.942, $3.75,$3.65 Major Resistance: $4.394, $4.461-$4.475, $$4.901,
The storage release provided little momentum as prices challenged the highs but could not eclipse. Now the market will look for additional fundamental reasons to direct the next bias.
Major Support: $3.06, $3.00-$2.97, $2.843, $2.727, $2.648 Minor Support : $4.16, $4.08, $3.16 Major Resistance: $4.373, $4.461,
Price action is holding firm with some tight daily ranges which signals a lack of commitment from the masses. Today may provide additional information on the the near term bias. While the break above $4.00 provided some income in the last week, the storage report will determine the future action in the next week.
Major Support: $3.06, $3.00-$2.97, $2.843, $2.727, $2.648 Minor Support : $4.16, $4.08, $3.16 Major Resistance: $4.373, $4.461,
After gaining in strength for a couple of days, the action started a “consolidation” process yesterday which could be a signal for additions to the gains later in the month. Can’t say the high end of the range for the Dec contract has been established — but would expect a brief retreat around the storage release and that may provide the indication of the high side of the new range.
Major Support: $3.06, $3.00-$2.97, $2.843, $2.727, $2.648 Minor Support : $4.16, $4.08, $3.16 Major Resistance: $4.373, $4.461,
The bullish trend from last week’s storage release and weekly close continued on Monday which is good to see. I have read that much of the bullishness is due to forecasts for the winter which is normal for establishing the run that tops for the annual Q4 high. Before I go all in, I want to see a retracement that challenges some support zone and if it holds — then break out higher. The market will convince me that a strong Q4 run is in place.
Major Support: $3.06, $3.00-$2.97, $2.843, $2.727, $2.648 Minor Support : $3.16 Major Resistance: $4.168, $4.461,
Going to keep this abbreviated as I have other issues with higher priority. Clearly, looking at the chart above you expect commentary suggesting a reversal on the Weekly chart. Not so fast — nearly $.50 of that reversal was the premium afforded at expiration. It may prove out to be a reversal but need to witness after challenges to support. Continue to expect December to fail at resistance, specifically the trend line decline from its March and June highs and its 20 – weeks SMA, Expect December’s premium over expired November to diminish but also expect the new prompt to find substantial support between $3.60 and $3.75.
On more technical analysis expect that prompt gas has traded a higher continuation low…the September low higher than the August low, which is an essential characteristic of an emerging uptrend and the October low higher than the September low. Expect opportunities to buy support during calendar November but expect those opportunities to be fleeting.
Am headed to visit my granddaughter tomorrow and that will prevent my from writing a Daily for Thursday — but no issues as most of you know my attitude about the market either side of expiration. I do not trade the market as it is suspect to trade variances and influence not helpful to technical analysis. What I will leave you with is watch the ranges — especially the soon to develop range in the Dec contract over the next two days.
Major Support: $3.06, $3.00-$2.97, $2.843, $2.727, $2.648 Minor Support : $3.16 Major Resistance: $3.39, $3.62, $3.80-$3.85, $4.168, $4.461,
