Author: Willis Bennett

Market Digests Losses

Daily Continuation

I know the storage report is released today but the market doesn’t seemed that concerned about it. My thoughts continue to be that prices will likely continue to test the lows but will be subject to “knee jerk” reactions from weather forecasts. The recent range is intact near term ($2.44-$2.673), with the only expansion toward the downside.

Support: $2.373, $2.255-$2.176
Minor Support: $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.89, $2.98-$3.05,
Minor Resistance: $2.547-$2.566, $2.806

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Prices Reverse Off of Low Extension

Daily Continuous

The first stop in the declines stopped yesterday at $2.454 (not sure why) but they garnered support and rallied at the close of the trade day. I have been calling for a test of support for the last week, not sure whether the tests are over or not but we are starting to see some support areas that have low risk buying opportunities. The range continues (between $2.25 and $2.80) and the market has not shown me any reason for variance.

Support: $2.373, $2.255-$2.176
Minor Support: $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.89, $2.98-$3.05,
Minor Resistance: $2.547-$2.566, $2.806

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Gap Closes

Daily Continuous

As mentioned in the Weekly section of the web site- the gap that had been in the charts since the first trade day of 2021 was closed yesterday with the declines. Prices are not oversold and look to want to test some significant support zones. Key is the Dec low of $2.238 as a break below will likely open significant declines. A break below $2.516 will open up a potential “quick trip” through the $2.40’s.

Support: $2.373, $2.255-$2.176
Minor Support: $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.89, $2.98-$3.05,
Minor Resistance: $2.547-$2.566, $2.806

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As Expected

Daily Continuous

Not sure what happened to the distribution via email yesterday but the Weekly section in the web was spot on to the expected test of support provided by the early month gap that remains. Even-though prices rebounded off of the test, expect additional tests again today with more traders available.

Support: $2.566, $2.373, $2.255-$2.176
Minor Support:$2.547, $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.89, $2.98-$3.05,
Minor Resistance: $2.806

Sunday Opens Weaker

Daily Continuous

An abbreviated edition today as most folks are not in the office, rather celebrating the holiday. Prices opened Sunday night with a $.10 decline, then retraced some of those declines. Anything can happen on holidays when the trade is extremely light. Look for the recent range to remain in place but be careful if you are in this market today.

Support: $2.566, $2.373, $2.255-$2.176
Minor Support:$2.547, $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.89, $2.98-$3.05,
Minor Resistance: $2.806

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Higher High — Quiet Week

Weekly Continuous

The weekly chart above shows the weekly reversal from the December low followed by a gap higher to begin ’21; the two weekly closes above the trend line declining from the October high and December high; and this week a close above the ten week SMA. While these actions could lead to a bullish bias to trade, still expect another test of support and the area around $2.60 has become a well defined area for initial support. From there the gap between $2.566 and $2.547 which still exists in the Daily and Weekly charts.

Managed Money Short Positions vs Price

Last week’s close occurred with an increase in weekly volume but additional declines in open interest. The chart above shows the open interest declines occurred partially from the speculative interests leaving the market. It is interesting that the speculative length entering the market offset the losses from the shorts leaving the market. For the market to achieve significant gains the open interest will have to start gaining as well as maintaining the gains in volume.

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Round and Round We Go

Daily Continuous

A full circle trade day as price jumped at the start — only to give it through out the trade day. Similar action to Tuesday. I do not consider a decline to $2.70 as a definitive test of support — but I may wrong. Wrote yesterday about the goals of these declines (mentioning the $2.70 area as the initial zone) and nothing today has changed those opinions.

Support: $2.566, $2.373, $2.255-$2.176
Minor Support:$2.547, $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.89, $2.98-$3.05,
Minor Resistance: $2.806

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Just Chugging Nowhere’s

Daily Continuous

Finally got the declines but they came no where near the levels to define the market mid term, rather just re-affirmed the recent trade range. Have sent out a note to the long range clients to watch this market as it hasn’t gone down when demand forecasts looked weak (last two weeks) and prices have remained firm. It also bothers me that the next 6 months trade in a $.15 window. To my memory (declining as it is) I can’t remember this type of differed set up to the prompt Feb contract.

Support: $2.566, $2.373, $2.255-$2.176
Minor Support:$2.547, $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.89, $2.98-$3.05,
Minor Resistance: $2.806

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Rally Hits Serious(?) Resistance

Daily Continuous

Prices challenged resistance that I did not consider as it hit the highs from Nov ’19 (see Chart below) which had long since been traded through but I left it on the Weekly chart:

Weekly Continuous

From the highs, the market reversed, gradually melting down and then collapsing at the end of the trade day. Not sure what spooked the rally up to the highs, but now the market has successfully tested resistance, expect the market to test support. Question is which level of support- The gap from the beginning of the year should be included in the longer term mix– but before that look at the area either side of $2.70 to provide near term support.

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Reversal — Now a Test of Resistance

Daily Continuous

Not sure what caused the reversal but it was serious enough to take a 4 penny decline and turn it into an 8 penny gain. Expected tests lower yesterday an possible closing the gap from the first week, but not to be and now it looks like a test of resistance at $2.81 is in the cards. That is a reversal and how far it goes remains to be seen.

Support: $2.373, $2.255-$2.176
Minor Support:$2.547, $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.98-$3.05,
Minor Resistance: $2.806

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