Check the Weekly section but the declines have been extended from last week in the early trade last night. Results will be proven later but the market is hitting the extreme zones on the over – sold levels.
Major Support: $4.378, $4.34,-$4.149, $3.638 Minor Support: Major Resistance 4.75-$4.825, $4.948, $5.056
The warming weather trends last week took prices down to test levels of support that have not occurred since a year ago. As discussed last week the market has a tendency to develop a key level around the 1st of January.
…late December/early January highs or lows have consistently been disproportionately important going forward into each new year.
My good friend and phenomenal technical / history analyst provided me with the following (take from it what you will):
THE “JANUARY PHENOMENON”.
Almost since the beginning of recorded time (which in natural gas trading for convenience begins in December ’91 – January ’92 although trading at the NYMEX first began in April of ’90), late December/early January highs or lows have consistently been disproportionally important going forward into each new year.
To summarize…of those 31 years (since ’92):
Twenty – two have begun with a gap (although a couple of those times the gap occurred during the last or next to last trading day of the previous year).
In seven of the thirty – one years (five of which began with a gap) the high of the year traded during January, most often during the first week.
In seven of the thirty – one years (five of which began with a gap) the low of the year traded during January, most often during the first week.
In the other seventeen years, twelve of which began with a gap, either the high or low for January would not be violated for a period of months. If the gas market was rising the January low presented substantial support well into the New Year. If the gas market was falling the January high was substantial resistance. While nothing is always in the gas market, whichever is first violated (the January high or low) sets the direction of gas prices for an extended period.
Over the last five years the January low has been the low of the year twice…in ’21 and ’22. The January high was the high of 2019. In ’20 the January high was not exceeded until August, in ’18 not until November.
Expect a significant high or low to occur between January expiration and mid – January
Declines took prices down to and below the calendar Nov lows (clearly bearish) but did not close below and then recovered after the primary market close. Not sure if were going to test the October lows on this collapse but it is likely to occur (perhaps at the first of the year— see Weekly history comments). I apologize for missing the Daily yesterday — but that will not be the only occurrence for the rest of the month as I am traveling and celebrating the season. I will try to do my best but……..
Major Support: $5.61-$5.44, $4.716, $4.705-$4.68 Minor Support: $5.47, $5.337 Major Resistance$6.18-$6.29, $6.687, $7.038 $7.19-$7.221, $7.42, $7.532, $7.60-7.75, 8.021
Follow through buying took the prompt to $7.058 before a reversal lower. Another one on Tuesday in the opposite direction set the week’s high at $7.105 testing the resistance from the intersection of the 20 – week SMA and the still rising 40 – week SMA. From those levels, prices immediately retraced and closed the gap from Monday and closed the week in the middle of the range.
The results left prompt January $.355 higher, but examination of individual monthly gains in the winter prices, showed an interesting divergence. Weekly gains of February were over $.20 except for March. Sandwiched between February’s + $.221 and April’s +$.229 was March at +$.037. Chances are (guesses really) are that difference was a result of substantial buying of January and February while simultaneously selling March– sometimes referred to as a near – term bull spread. Building length in the remaining winter while offsetting that length in March. With strong volume in that spreading would indicate that folks are expecting additional winter strength in early 2023.
First down , then up, now this week down– lots of gapping going on. The wonderful world of trading temps and changing forecasts. That said, there is no gap in the charts as the low last Friday $6.219 and the high last night was $6.23 but there is a substantial gap from where the last trade was on Friday (guess they were expecting cold forecasts). Oh well, still in the range and just waiting for folks to play during the Holiday week. Stick to the ranges discussed for the last month or so and be sure to read the Weekly
Major Support: $6.39, $5.61-$5.44, $4.716, $4.705-$4.68 Minor Support: $6.18, $5.47, $5.337 Major Resistance$6.687, $7.038 $7.19-$7.221, $7.42, $7.532, $7.60-7.75, 8.021
Prices held firmish on the close but it also looked like the market is not comfortable being above $7.00. The action held that area for a while yesterday — but then relented and in the post market extended downward and continue to tonight. Technical indications say nothing has changed from yesterday (high side middle of the range). Talking to fundamental traders, cash prices have been firming (not talking CA which has been above $30) of late with the cold weather coming. Will be interesting to see if cash leads the NYMEX which has not been a common occurrence of late.
Major Support: $6.39, $5.61-$5.44, $4.716, $4.705-$4.68 Minor Support: $6.18, $5.47, $5.337 Major Resistance$6.687, $7.038 $7.19-$7.221, $7.42, $7.532, $7.60-7.75, 8.021
What took prices higher got eliminated yesterday as prices declined to close the gap from Monday, only to find some support at the end. Still remaining in the higher third of the range prices have traded this month– there is little to trade until the market decides to trade on winter or the LNG facility staying offline indefinitely.
Major Support: $6.39, $5.61-$5.44, $4.716, $4.705-$4.68 Minor Support: $6.18, $5.47, $5.337 Major Resistance$6.687, $7.038 $7.19-$7.221, $7.42, $7.532, $7.60-7.75, 8.021,
Two days in a row that a rally off of changing patterns in the forecast have kept prices elevated. Lots of folks (fundamental) are convinced that the winter will not provide enough to offset the dry gas production gains made during the last few months– so I have been told– I have no clue because I choose not to get whip-sawed by following the swings on forecasts. From the technical perspective– the market tested and set a lower low in October then promptly reversed. Late last month (into December) prices again collapsed but could not even test the lower low from October, before finding support. Now we have a market rebounding, seemingly wanting to test the highs from last month between $7.42-$7.60. This will get interesting if the forecasts continue to support the run.
Major Support: $6.39, $5.61-$5.44, $4.716, $4.705-$4.68 Minor Support: $6.18, $5.47, $5.337 Major Resistance$6.687, $7.038 $7.19-$7.221, $7.42, $7.532, $7.60-7.75, 8.021,
The large gap opening was exciting but the trade during the day retraced a large chunk of the gap, but not closing the gap. Would expect the gap to close during the day sometime this week, unless the forecast remain cold longer in the month. Mentioned the $7.00 area yesterday and that will continue to be the key are of resistance, all based upon the weather forecasts.
Major Support: $6.39, $5.61-$5.44, $4.716, $4.705-$4.68 Minor Support: $6.18, $5.47, $5.337 Major Resistance$6.687, $7.038 $7.19-$7.221, $7.498, $7.532, $7.71-7.75, 8.021,