Minor Support: $1.767-$1.78, $1.833 Major Resistance:$1.883, $1.993, $2.029, $2.08-$2.10, $2.34, $2.437, Minor Resistance:
Price broke beyond minor resistance yesterday and are now poised to test the resistance area that has held prices since late January. This will be the third test, which corresponds to the third test of support last week, as prices traded to the lows. As you are aware, I have been a range trader this year between $2.00-$$1.60 and will continue this behavior on this test of resistance. With that said, I am not likely to short the price action on the test as I have twice before. Lets see what happens.
For the third consecutive week prices traded below the key area at $1.61 set a low between $1.519-$1.55 only to give up the losses by the close of the week. Last week, the bids took the prices to the high of the day as the market closed. Extending the declines seems to be exhausting for the bears as last week, the bears could just manage the low at $1.521 before the bids hit the action. Have some interesting comments on the full website that is now up and rolling — please take a moment to review as the web is free for the remainder of the month before it becomes a pay site in May (Daily will no longer be free). While opinions and interpretations may be different, I am more interested in comments about the site.
Major Support: $1.611, $1.555–$1.519, $1.481 Major Resistance:$1.883, $1.993, $2.029, $2.08-$2.10, $2.34, $2.437, Minor Resistance: $1.767-$1.78, $1.833
That was a good test of support and now it is time to witness either a breakdown or a run to resistance. Sorry about not providing some clever insight as to the expected breakdown or break out but this type of consolidation trade is very common for nat gas and may continue for weeks. One event is guaranteed is there will be an end to this pattern — just a matter of when and direction.
Major Support: $1.611, $1.555, $1.481 Major Resistance: $1.99, $2.029, $2.08-$2.10, $2.34, $2.437, $2.48-$2.52, Minor Resistance: $1.728, $1.806, $1.883,
Prices continued to decline and gave a weak test of support with the lows. From there, prices rebounded slightly. Not sure if that was a full test of the support zones between $1.555-$1.519, as there may be a test today on the storage report. Play the range.
Major Support: $1.611, $1.555, $1.481 Major Resistance: $1.99, $2.029, $2.08-$2.10, $2.34, $2.437, $2.48-$2.52, Minor Resistance: $1.728, $1.806, $1.883,
What the market gained was taken away yesterday. Here we it middle of the short term range and nowhere to go based on fundamentals. Speaking of which, would love the hear of comparisons for receipt point nominations for April vs March– any of you folks that can clue me in to the variance I would be thrilled. Continue to play the range – right now — nowhere to go and nowhere to hide.
Major Support: $1.611, $1.555, $1.481 Major Resistance: $1.99, $2.029, $2.08-$2.10, $2.34, $2.437, $2.48-$2.52, Minor Resistance: $1.728, $1.806, $1.883,
Prices started the month with some limited strength, but I will be more interested in how the nominations and deliveries coordinate with the month change and season change. For now, continue the range trade between $1.51-$2.00 and we seem to be in the middle currently.
Major Support: $1.611, $1.555, $1.481 Major Resistance: $1.99, $2.029, $2.08-$2.10, $2.34, $2.437, $2.48-$2.52, Minor Resistance: $1.728, $1.806, $1.883,
March went out quietly as expected and now we enter May as a prompt month. Will be expanding on historical tendencies of the May contract later in the week– but for now it seems that it will go back to where April left off. Play the range from last month for now– I think some interesting information will be developed when we get to the May nominations in the physical world.
The lower low last week ($1.519) on the open of the trade on Sunday night was quickly replaced by subtle strength. The impacts from the virus may have short term expectations of demand destruction ( though not being a fundamental trader- I don’t care) are now being offset with serious implications of production issues from the declining crude price. Looking at the chart above – some folks supported the April contract into expiration which is contrary to the fundamental trade. It is likely that prices will decline to close the small differential from last weeks contract expiration (the lowest since Sept ’95) and the close of the May contract- from there the market will be fun to watch. Also, watch the nominations and flow data early in the month as any hedges from the winter are gone and if folks hedged they may not choose to show up with their gas in this price environment. The three month range remains the trade game.
Monthly Continuation
I remain on the sideline for the fundamental arguments of whether prices are headed up due to oil price issues impact and the virus blues. All I can see in the technical data is that the price continues to have problems at major support and the fact prices are trending into 25 year lows suggests to me that things will change. Unfortunately for nat gas traders, those changes can be violent. Longer term, the weakness in the summer strip was met with strength in the winter strip — while speculative shorts declined. The market may be sending a strong signal for the upcoming summer.
Major Support: $1.611, $1.555, $1.481 Major Resistance: $1.99, $2.029, $2.08-$2.10, $2.34, $2.437, $2.48-$2.52, Minor Resistance: $1.883,
Commodity Futures Trading Commission
Natural Gas Managed Money Long (red) vs Managed Money Short (purple) positions
Additional short covering occurred last week but what was of interest to me, was the gains in the winter strip while the summer strip found just minimal support. The market is showing a slight change in long term bias with this action. Time will only tell, but it is beginning to look like the bears are becoming a little spooked and loosing impact.
Not much to say with the upcoming expiration as price action is low on volatility. Obvious to work on May contract and depending on how April expires — play that momentum direction — whether to the low or high end of the range.
Major Support: $1.611, $1.555–$1.519 Major Resistance: $1.99, $2.029, $2.08-$2.10, $2.34, $2.437, $2.48-$2.52, Minor Resistance: $1.883,
We have two days left in the April Contract and so far the process has been quiet– though I see no reason for any volatility. Not much to see here in gas except range and prices now are closer to the low end of the range.
Major Support: $1.611, $1.555–$1.519 Major Resistance: $1.99, $2.029, $2.08-$2.10, $2.34, $2.437, $2.48-$2.52, Minor Resistance: $1.883,
