Author: Willis Bennett

What Gives With This

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When I wrote the Weekly analysis over the weekend, my full expectation was for prices to test support at the break out zone around $3.00. Prices opened Sunday night up $.25 and seemingly wanting to challenge last weeks highs. All of this action is with the contract expiring in three days and we have documented the weakness of expiration’s this year. Will be interesting and likely telling for the next few months.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.16, $3.00, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.307 $3.392, $3.487

Break Out Confirmed Next Step Unknown

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The break out continued as prices rallied before the storage report release. The trade (post storage) was quiet and declined late in the trade day. That action was likely due to late coming bulls taking profit on earlier positions. I was more interested in the buying (granted after market) in the light late day that sent prices back up to the $3.40’s. As suspected the gains made on Wednesday was generated from short covering (open interest declined on Wed) and I would expect slightly more bears were forced to cover, after a somewhat bullish report, produced little action. As long as this week’s support levels are tested and hold– then there is likely a bias conversion going on.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.16, $3.00, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.307 $3.392, $3.487

Break Out?

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Did not write on the Tuesday break above $3.00 because prices did not close the day above that break out level and I assumed that a break down into the zone would follow. Much to the contrary, prices rallied yesterday, not only closing above the key zone but with higher volume and waiting on open interest (lags by a day). This may be the initial start to the annual Q4 rally (higher high already in place) but we all know that today is the storage release and it may have a mitigating impact. Will look into the developing “head and shoulders” technical patter and its impact in the Weekly report on Sunday night– in the mean time you can clearly see the inverted pattern in the Daily Chart above.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605
Minor Support : $3.00, $1.856,$1.89-$1.856
Major Resistance: $3.00, $3.16, $3.307

Been Here Before

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This will be the fourth time that prices have rallied to $3.00, the three previous occurrences have been met with serious selling and an immediate retracement to support zones. Does this attempt have any variation — in outcomes? We shall see.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605
Minor Support : $1.856,$1.89-$1.856
Major Resistance: $2.914, $3.00, $3.16

Well Defined Range Long Term

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Discuss the trade for likely the remainder of this month in the Weekly section and the Daily has not insights beyond that discussion. Keep selling premium to make some small gains until this stagnant price action re-defines the intention for direction.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605
Minor Support : $1.856,$1.89-$1.856
Major Resistance: $2.914, $3.00, $3.16

Not Much To Analyze

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December began the week with a gap higher ($2.748 – $2.769) and extending its rally to test conventional, moving average and mathematical resistance (all around $3.00).

With volume increasing (average daily volume was 180,000 contracts higher) and open interest declining (total open interest fell 57,000+ contracts from last weeks all – time high) suggested the potential for a spirited round of short covering. Unfortunately for the bulls, December failed at that resistance and declined to close Monday’s gap. Trade up to and failure at a nearly identical price in consecutive months suggests a textbook “double top”, not unlike the twin lows of then prompt November at $2.210 on 10/21 and $2.200 on 10/29, and previously before that prompt October at $2.214 on 09/11, $2.229 on 09/12 and $2.223 on 09/19, clearly defining the low end of trade range.

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Smack Down

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Now that is a smack down for the recent gains in trading. Up to resistance and then the volume came in an defined near term direction. Back into the range trade and look to last months price behavior for direction.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605
Minor Support : $1.856,$1.89-$1.856
Major Resistance: $2.914, $3.00, $3.16

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Resistance Top While Storage Release On Hand

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Prices closed just below the resistance area at $3.00- the volatility surrounding the storage release will likely confirm of deny a potential break out.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605
Minor Support : $1.856,$1.89-$1.856
Major Resistance: $2.914, $3.00, $3.16

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Prices Remain Up Against Resistance

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Similar September trade, prices challenged the $3.00 zone only to retreat in just a few days, the jury is out on what will happen this month. All part of a consolidation process leading to the next move.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605
Minor Support : $1.856,$1.89-$1.856
Major Resistance: $2.914, $3.00, $3.16

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Quite A Bounce

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Was expecting a bounce off of the failed test of support but not in one day, nor the first trade of the trade day. Now prices are challenging the near term resistance– would proceed cautiously as yesterday was a lighter than normal volume day– due to the Veteran’s Memorial holiday.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605
Minor Support : $1.856,$1.89-$1.856
Major Resistance: $2.914, $3.00, $3.16

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