Category: Daily Call

Price action garnered the power to break below the recent range trade support levels and taking the price down to the highs from late August ($2.743). The release of CFTC data shows the Managed Money short segment adding to their positions through the report date (Nov 24th). Clearly looks like a bearish bias going into the storage report.

Support: $2.61- $2.621, $2.425,$2.373
Minor Support:$2.743
Major Resistance: $2.98-$3.05, $3.091, $3.151, $3.24,
Minor Resistance:$2.887

Price action continued in the narrow range that has held since the expiration of the Dec contract. This range has been on each side of the gap on the upside discussed last week ( two red lines above). Normal trade has gaps being important associated with breakouts or breakdowns– this one seems to be developing a consolidation range.

Support: $2.82, $2.61- $2.621, $2.425,$2.373
Minor Support:$2.887, $2.785
Major Resistance: $2.98-$3.05, $3.091, $3.151, $3.24,
Minor Resistance:

Well — I was off expecting additional tests of support yesterday– instead prices started up and stayed up testing the initial resistance area around $3.00 (after opening above minor resistance area). One would have to believe that the market wants to test that resistance area again (if it is supported by what ever fundamental data is directing these small counter trend rallies). The recent range $3.00-$2.80 remains as the trade range with low risk stops just beyond the boundaries.

Support: $2.82, $2.61- $2.621, $2.425,$2.373
Minor Support:$2.887, $2.785
Major Resistance: $2.98-$3.05, $3.091, $3.151, $3.24,
Minor Resistance:

Not surprising were the gains made in the Dec contract and that spilled over to the January contract which takes over as prompt after the Thanksgiving holiday. Let me take this opportunity to wish all of you and your families a wonderful holiday, regardless of the circumstances. Jan is trading at a $.12 premium and I am not convinced that there will not be a retracement back to close that differential. Not sure it will take the amount of time that the Dec contract needed to close the differential, but it will happen short of a blustery change to the weather forecasts.

Major Support: $2.61- $2.621, $2.425,$2.373
Minor Support:
Major Resistance:$2.82-$2.853, $2.887, $2.98-$3.05, $3.091, $3.151, $3.24,
Minor Resistance:

Options and the December contract are entering the expiration period so my focus will be on the January contract. The premium associated with the Jan contract has come in from $.15 to $.12 over the last couple of weeks. Not sure why the premium should exist with the fundamentals being less than supportive compared to the existing market, perhaps this will be corrected as the market defines expiration.

Major Support: $2.61- $2.621, $2.425,$2.373
Minor Support:
Major Resistance:$2.82-$2.853, $2.887, $2.98-$3.05, $3.091, $3.151, $3.24,
Minor Resistance:

Well that was a resolute decline on gaining open interest and an increase in volume. It would be convenient for me to announce the bearish trends in the market but instead, I will remind all that a few weeks ago– the weekly close could not be more bullish only to watch prices decline, and a before that mentioning it couldn’t look more bearish and prices rose. Prices look bearish going into this week with a couple of gaps in the daily chart (one above from last Monday and the one from last month on the downside). These gaps are highlighted on the chart above with the red horizontal lines. Don’t expect these gaps to b closed during the expiration process.

Major Support: $2.61- $2.621, $2.425,$2.373
Minor Support:
Major Resistance:$2.82-$2.853, $2.887, $2.98-$3.05, $3.091, $3.151, $3.24,
Minor Resistance: $2.663

Wanted to provide this chart in the Weekly section as it displays the gap (in the Daily Continuation) from last Monday’s opening and collapse sending prices down $.345 during the week. This ten percent reduction may provide the potential for a lasting influence on prices the remainder of the winter. Last week’s collapse occurred on greater volume and gaining open interest suggesting that there was additional pressure on prices from the speculative community. Looking at the latest CFTC data (for positions on Nov 17th) there was a substantive increase in the Managed Money short positions the week prior and into the last week.

Tuesday’s low was 2.649 and producing a low volume reversal with little follow through taking prices to 2.525 on the highest volume of the week (highest daily volume since the August breakout day) and the lowest daily close since the last close under the 200 – day.

The declines yesterday occurred prior to the actual release of the storage report indicating that the report had little to do with the movement (regardless of what the press says)– who cares anyway. Fact is, the market found the enthusiasm to pressure prices further. What is starting to develop in conversations — “winter is over”– OK play accordingly. Heard that in Nov 2017 only to find out (expensively) not so in December. Play this game with stops as the bias can flip quickly.

Major Support: $2.61- $2.621, $2.425,$2.373
Minor Support:
Major Resistance:$2.82-$2.853, $2.887, $2.98-$3.05, $3.091, $3.151, $3.24,
Minor Resistance:$2.637-$2.657, $2.663

After a ten percent decline what did you expect?— I get a kick out of traders, with the bears astonished that prices did not collapse another ten yesterday. Sorry, declines like that need a time to confirm (or consolidate) and yesterday represented the market taking a moment to breath and figure out the next move. Catalysts that send a commodity market down 10% in a day are not usually followed by the event causing another 10% decline– normally the market needs to digest the first event.

The action has provided a near term support zone (yesterday lows) and a short term resistance area (gap from Monday)– would play that range until we find out if there is another catalyst to be defined.