Author: Willis Bennett

Gains Continue

Daily Continuous

The March contract exploded higher yesterday and while the summer strip gained, it was at a much smaller pace. March is clearly under the gun as the fundamentals (demand) and the production freeze offs are going to carry prices in the very short term. The question remains, how does the market respond after the temps warm up. BTW look for a big withdrawal this week and next week. Some of my analytical friends (fundamental) tell me that the surplus to the 5 year average and YOY comparisons are likely to become deficits by March.

Support:$2.98-$3.05, $2.373–$2.356,$2.255-$2.176
Minor Support:$3.108, $2.806, $2.71, $2.60-$2.554,$2.483, $2.162
Major Resistance: $3.316-$$3.396, $3.486
Minor Resistance:$3.172

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Range Blows Up

Daily Continuous

That is a trade day– We got the break out above (finally) then had a correction back into the key resistance area ($3.00-$3.05) only to close above the key resistance area ($3.10). Now what happens? The major break out above resistance was not shared by all the summer months, which leads the interpretation that the rally of last couple of days is short lived. Today will hold a near term clue.

Support: $2.373–$2.356,$2.255-$2.176
Minor Support:$2.806, $2.71, $2.60-$2.554,$2.483, $2.162
Major Resistance: $3.108, $3.172, $3.208-$3.214
Minor Resistance:

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Range Is a Range Until It Isn’t

Daily Continuation

Discussed the range and three attempts to close above the top end of the range last week. Yesterday, in light trade, the market traded up to test the high side of the range and then opened above it in the night opening. This is a critical time for the bulls as there is so much bullish news and data points from the fundamental perspective, if prices can’t confirm the light market gains — then there will be a correction. Discussed some of the supporting technical indicators in the Weekly section of the website yesterday– take a look.

Support: $2.373–$2.356,$2.255-$2.176
Minor Support:$2.806, $2.71, $2.60-$2.554,$2.483, $2.162
Major Resistance: $2.98-$3.05, $3.108, $3.172
Minor Resistance:

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Market With Some Changes within Defined Range

Weekly Continuation

Last week’s trade was “inside” the prior week’s range and the nearly identical open and close.  Prices continue above the 10, 20 week SMA, on a closing basis for the last two weeks. Resistance is clearly defined by the high of last week and prior week.  If that resistance is overcome expect a test of three weekly highs March traded between 10/19 and 11/02 (3.318, 3.320 and 3.316). Short of that break out event- expect the range trade to be re-in forced between $2.70-$3.00.

Weekly Continuous with Volume and Open Interest

Starting to see some confirmation of the stronger prices as the total open interest and volume has gained over the last two weeks as prices have risen. Have discussed over the last two months about the bias change (bullish) that commenced after the multi-year low that posted at the end of June. Those discussions have centered around the series of higher high and higher lows. One element that has been lacking was the market confirming the bias change with the volume rising and open interest rising simultaneously. The volume two weeks ago was the highest since last March followed up with a strong volume last week. Both those weeks were met with gains in total open interest. Of greater interest is source of the gains– look at the following two charts– notice that some of the volume gains as prices rallied were associated with short covering by the speculative crowd as prices showed strength two weeks ago.

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Almost Perfect

Daily Continuous

I know it has happened, I just can’t remember when the market has provided such perfect ranges to trade. Granted, you would of had to been up early in the mornings or late at night to trade the extremes of the recent $.30 range this month, but the first two weeks of February has provided a nice stream of revenue from the range. Spoke yesterday about the market seeking to run back up above $3 entering the high end of the range. The question was would it stay up or decline back the way it has twice before this month. Clearly, this was a low risk selling opportunity (stops just a nickel away) but the problem was it hit above $3.00 early in the morning. I am not a big fan of placing orders in over night- so when the market was starting to retreat, I was a little late to the dance. This is the third time the range has been defined this month, no clue how many more times will get the chance to “play it again Sam”, but I will be waiting for the fourth.

Support: $2.373–$2.356,$2.255-$2.176
Minor Support:$2.806, $2.71, $2.60-$2.554,$2.483, $2.162
Major Resistance: $2.92-$2.997, $2.98-$3.05, $3.108
Minor Resistance:

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Is Another Challenge Developing

Daily Continuation

Was beginning to wonder if the market was suffering from “buy the rumor sell the fact” as prices could not gain any traction. Yesterday, and early trade today has confirmed that the cold weather patterns will have an impact on demand. Now the question remains does the fundamental data points have the strength to trade above and CLOSE above major resistance between $3.00 and $3.05. If we get the same decline at resistance on the close that we witnessed twice before then nothing has changed and the market remains range bound near term. Otherwise it gets interesting.

Support: $2.373–$2.356,$2.255-$2.176
Minor Support:$2.806, $2.71, $2.60-$2.554,$2.483, $2.162
Major Resistance: $2.92-$2.997, $2.98-$3.05, $3.108
Minor Resistance:

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Consolidation Continues

Prices traded down slightly in the face of the cold out break coming — which does elicit the comment “if prices don’t go up when the indicators say they should — then they are headed down”. To early to tell with this set up but the fundamental inputs shout for higher prices but perhaps these cries were why we are at the levels now. Time will tell– but the current demand profiles will likely eliminate the surplus of storage in the coming weeks which will force prices to establish a new or the same range for the upcoming spring.

Support: $2.373–$2.356,$2.255-$2.176
Minor Support:$2.806, $2.71, $2.60-$2.554,$2.483, $2.162
Major Resistance: $2.92-$2.997, $2.98-$3.05,
Minor Resistance:

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Quiet Start to the Week

Daily Continuous

Not much to report on yesterday’s action with prices staying close to the opening after a brief run to $2.985. This is an interesting trade as the weather forecasts are showing frigid cold coming (so I have heard) and extending longer in time than folks thought, yet prices are relatively calm. This frigid February may take the storage surplus (over the 5 year average) out to the wood shed. Again, I have no idea how you fundamental folks trade, but I have to believe that prices have not baked in the results of the upcoming period of weather.

Support: $2.373–$2.356,$2.255-$2.176
Minor Support:$2.806, $2.71, $2.60-$2.554,$2.483, $2.162
Major Resistance: $2.92-$2.997, $2.98-$3.05,
Minor Resistance:

Consolidation and Continuation of Recent Trend

Weekly Continuation

Three Friday’s ago, prompt February traded down to new lows for January.  That weakness brought an expectation of lower prices when trading resumed.  Rather than follow through to the downside prompt gas opened and left a small gap higher.  February hardly looked back before settlement .314 higher than that weak previous week’s close.  Last Friday, new prompt March didn’t give up all the expiration week gains but traded a daily reversal lower (that was discussed), dropping .146 from the day’s high and ended the week only a penny off the low.  The declines last week, with the selling, brought a similar expectation, March would be offered lower when trading reopened.  Instead, the first trading day of February began with another small gap higher (2.710 – 2.712). 

Needless to say, after last week’s weak close, expect prices to open higher on Monday, the question remains if the market has the support to close above the key resistance area around $3.00. Twice, last week, prices rallied above $3.00 only to find significant selling and resistance that sent prices down below $2.90 and into support zones. Will a third time be the charm?

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Monday Trade Trend Continues

Daily Continuous

Been the trend recently (see Weekly section) for prices to reverse off of the previous Friday action. Sure enough, early prices are up Sunday night, from Friday’s close. The market has not shown the ability to close above the recent break out highs, retracing back below during the trade day. Tells this trader that the recent range continues and will continue to play it.

Support: $2.373–$2.356,$2.255-$2.176
Minor Support:$2.806, $2.71, $2.60-$2.554,$2.483, $2.162
Major Resistance: $2.92-$2.997, $2.98-$3.05,
Minor Resistance:

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