Category: Daily Call

Prices continued lower from the end of Friday on the open Sunday night. There seems to be a mini-range developed between $2.61 and $2.85 for the last few days. Would play that range with stops just on the other side depending on which way you are playing. Went into expectations of the next few days leading into expiration, in the Weekly area. The differed winter contracts continue to show buying regardless (to a degree) of the prompt action.

Major Support: $2.476-$2.446, $2.392,$2.258-$2.253, $2.219
Minor Support: $2.618, $2.508, $2.339
Major Resistance: $2.789-$2.801,$2.908-$2.928,$2.973-$3.00

The late night declines from Tuesday held all day which signals the weakness to the run early in the week. Prices now sit in the middle of the range developed after the Nov took over as prompt. Do you feel lucky? I have no idea what the storage report will look like – but the market has shown me no substantial support for the short covering rally (early in the week) extending into the future therefore I do not think the declines for the Nov are not over yet.

Major Support: $2.454, $2.392,$2.258-$2.253, $2.219
Minor Support: $2.618, $2.508, $2.339
Major Resistance: $2.789-$2.801,$2.908-$2.928,$2.973-$3.00

Had written the Daily after the close and was going to discuss an additional failure of prices at well defined resistance during the trade only to see a collapse of prices after the close when the market reopened. I can only suggest that whatever fundamental data hit the market on Sunday, was reversed late yesterday. It will be interesting to watch how the trade behaves when it has full market participation, the declines could continue to last Friday’s low $2.618 or does it find support near term.

Major Support: $2.454, $2.392,$2.258-$2.253, $2.219
Minor Support: $2.618, $2.508, $2.339
Major Resistance: $2.789-$2.801,$2.908-$2.928,$2.973-$3.002

Prices exploded in lighter trade on Sunday night, breaking above the near term resistance. Now the question is, do prices close some of the substantial gap that exists in the charts? Should it try, there may be low risk buying opportunities available. See the Weekly commentary for longer term impacts from the recent gains. This rally on Sunday may provide some opportunity for SHORT TERM SHORTs– but can’t stress the need for stops.

Major Support: $2.454, $2.392,$2.258-$2.253, $2.219
Minor Support: $2.74, $2.339
Major Resistance: $2.743, $2.789-$2.801,$2.908-$2.928,$2.973-$3.002

Initial results from the storage report were less than bullish but prices rallied slowly through the day and finished near the highs. The fundamental data shows a hurricane hitting the gulf and demand destruction coming. Not following the supply data, I have been told that the supply disruption has been basically offset by limits in LNG exports. So, not sure why some of the strength during the trade day.

Major Support: $2.376,$2.258-$2.253, $2.219
Minor Support: $2.316
Major Resistance: $ 2.693-$2.701, $2.723-$2.743, $2.781

Similar behavior yesterday as the run first thing in the morning started to challenge the resistance around $2.70 only to find consistent pressure for prices. It would seem that the market is determining whether the demand destruction and LNG restrictions due to the storm out weigh the loss of production. Until this struggle gets resolved, the recent range should be expected.

Major Support: $2.376,$2.258-$2.253, $2.219
Minor Support: $2.316
Major Resistance: $ 2.693-$2.701, $2.723-$2.743, $2.781

The action yesterday tested the resistance at and around the $2.70 area and failed again for the second time this week. This area is now established as formidable resistance for the near term. From that failure at resistance, prices continue to melt down closing the day near the lows. The market seems to be setting a range for traders and expect that to continue until the fundamental data point settle themselves out.

Major Support: $2.376,$2.258-$2.253, $2.219
Minor Support: $2.316
Major Resistance: $ 2.693-$2.701, $2.723-$2.743, $2.781

I have been waiting for an indication of the market start to establish a base from which a Q4 rally (annually) could begin– yesterday was not such an event. Instead, it looked like a basic near term short covering rally as prices retreated after a certain high (very near the gap from Nov ’19 that was closed on the first day of Nov prompt), declining during the remainder of the day. Not sure what spooked the bears (I have been told tropical storms destroy demand more than hitting production). Most commodities rocked yesterday — so perhaps that led to some of the strength.

Major Support: $2.373,$2.258-$2.253, $2.219
Minor Support: $2.32
Major Resistance: $ 2.693-$2.701, $2.723-$2.743, $2.781

In the early trade, natural gas wants to trade higher which will be interesting as it hits resistance zones, but perhaps it will trade up into the $2.50’s which will provide low risk opportunities for length. In the mean time, history does not support a break out above recent highs nor significant declines below the range from the expiration of Oct.

Expect a month of range trading for the Nov contract but perhaps I will be wrong. Until the market proves my errors – will continue to trade accordingly.