Category: Daily Call

Not a lot of change in the trade yesterday from what I discussed this morning. Mini range waiting on new news or another shoe. This gap is developing as a key support zone due to the fact it opens up further declines as discussed. A breakdown may also break the bullish bias (long term discussed here for two weeks) the market has maintained if it is extended far enough. From my fundamental folks, I am not sure how much warmer the temps can get so any adjustment in the forecasts may bring light panic to the bears. Speaking of which, I took a first look at the “winter is over” idea and remembered 2015, 2016, and 2017 on the charts. I will break down the results in the long term section during the day tomorrow.

Support: $2.425,$2.373, $2.255-$2.176
Minor Support: $2.162
Major Resistance: $$2.74-$2.789, $2.98-$3.05,
Minor Resistance: $2.55, $2.649, $2.798

My apologies for not getting this out through the email– I had some server issues that prevented such.

The prices have developed into a mini-range between $2.50 and the gap from the Nov premium. Almost seems like the trade is waiting for the next shoe to drop (perhaps storage report). From a technical standpoint, buy in front of the area of key support ($2.38-$2.40) with stops tight. When and if prices break below, the trip to $2.10 should be quick with just a couple of support zones. Still looking at years when winter was “over” in December only to find a reversal of thought.

Discussed yesterday that the market seemed poised to test the gap from the November contract premium and that test occurred yesterday in a mild form. I have heard from many regarding the winter being over and prices are doomed– my memory reminds me of other Decembers when everyone was convinced winter was “over”. I will en devour to review recent history to establish if this comfort in trade is warranted.

Support: $2.425,$2.373, $2.255-$2.176
Minor Support: $2.162
Major Resistance: $$2.74-$2.789, $2.98-$3.05,
Minor Resistance: $2.55, $2.649, $2.798

It seems that the price action wants to challenge the gap at $2.37 from the premium afforded the Nov contract as it took over as prompt in Sept/Oct. That extension should be expected early this week and has started late Sunday night.

January completed a continuation “outside” week lower .  The January contract traded its third straight lower weekly high and then on Thursday closed below the November low.  Volume during the declines was the highest since the first week in August as prompt gas was breaking out higher and the eighth highest in all of 2020.

In the Weekly section, I discussed the short /intermediate term cycle is bearish and the market is behaving accordingly. Yesterday, prices confirmed the bearish bias and the market is now in a sell the rally mode. The consolidation pattern of the last few days was waiting for a break out or break down– the breakdown is now in place breaking below, and closing below, the Nov lows.

Support: $2.425,$2.373
Minor Support:
Major Resistance: $2.98-$3.05, $3.091, $3.151, $3.24,
Minor Resistance: $2.74, $2.887

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: