Category: Daily Call

Subdued, but effective, were the slight declines in yesterday’s action. This behavior may continue as the Nat Gas European based platforms declined as well. Why do I bring these platforms into the conversation– was looking at some charts and found some similarities to the British and Dutch products and the U S gas contract. There may be more influence from offshore contracts than historically thought.

Major Support: $2.882, $2.853, $2.789, $2.657-$$2.637
Minor Support:$2.743
Major Resistance: $2.98-$3.05, $3.091, $3.151, $3.24, $3.361-$3.370,
Minor Resistance: $2.905, $2.922

What can you say– that was a weekly bearish reversal and all the charts do not look favorable for the bulls. I remember having similar thoughts two weeks ago after the bullish close and the rally off of the large gap from expiration, only to watch the market try to rally — fail– and push significantly lower. Now the same could be said about the market from a negative perspective– it has to expand prices lower– right. While I do not expect prices to drop another $.40 this week– there may be some extensions lower per my conversation in the Weekly section.

Major Support: $2.882, $2.853, $2.789, $2.657-$$2.637
Minor Support:$2.743
Major Resistance: $2.98-$3.05, $3.091, $3.151, $3.24, $3.361-$3.370,
Minor Resistance: $2.905, $2.922

After two days of declines, over $.35 in declines (10%), prices took a day of rest before the storage release. Needless to say, the over bought bias has been mitigated immensely and now it is up to see how the market interprets the first potential withdrawal of the season. Now you know I don’t track this type of information, rather I was told about the potential by a client. If it is a withdrawal — I would think that is a positive for the market — but then again what do I know. From a technical standpoint– the market is at a low risk area to enter length or shorts as the stop outs positions are under dime away – either long or short.

Major Support: $3.047-$2.98, $2.907, $2.882
Minor Support:$2.84
Major Resistance: $3.091, $3.151, $3.24, $3.361-$3.370, $3.423, $3.516

Prices opened weaker and extended the losses as the morning advanced, closing just off the lows. This action softened the over bought status discussed in the Daily and Weekly sections yesterday. Lacking any fundamental drama, these declines may challenge the lows from last Thursday ($3.15) before the storage release. The key question will be the gap that was discussed in the Weekly Section.

Major Support: $3.19, $3.101-$3.091, $3.047, $2.907, $2.822
Minor Support:$3.151, $2.98, $2.84
Major Resistance: $3.361-$3.370, $3.423, $3.516

The declines, narrowing the premium left after Nov expiration, was expected but did not see $3.15 as support that would reverse prices $.17 higher. Clearly, some shorts looking for supportive news from the storage release got caught. Is this the only test of the premium low? Not sure, but we know from the Nov contract, where prices declined for the first four days of Nov being prompt, the gap from the premium never closed. In the Nov contract prices declined 15% and yesterday’s declines are only a 5% decline. Major issue for the bulls is the high for December gas is only a nickel away. Must make this call– as my Weekly discussed, two weeks ago, that gap area around $3.05 has now defined itself as major support for the near term. The fact that yesterday’s decline never tried to test that area does little to alter this view.

Major Support: $3.19, $3.101-$3.091, $3.047, $2.907, $2.822
Minor Support:$3.151, $2.98, $2.84
Major Resistance: $3.318, $3.361-$3.370, $3.423, $3.516

Similar but not as much, November expired at a $.28 discount to December. Recall the premium Nov had to Oct was twice as much and Nov immediately declined but did not close that gap. I have been mentioning that I was expecting the Dec to decline to the key gap zone ($2.98-$3.047) regardless of whether the Nov contract closed and confirmed that gap. The market has shown no reason to diminish that expectation.

Major Support: $3.19, $3.101-$3.091, $3.047, $2.907, $2.822
Minor Support:$2.98, $2.84
Major Resistance: $3.318, $3.361-$3.370, $3.423, $3.516

For the third time in the last three days, prices broke above the old gap (discussed for the last few days) only to find selling and closing the day below the lower end of the gap. Clearly, there is formidable resistance around the high side of the gap ($3.047 original gap to $3.091 yesterday’s high). Perhaps, they will be more successful on the expiration of the November contract tomorrow but regardless, the Dec contract is likely to test this or nearby support in the coming weeks.

Major Support: $2.907, $2.822, $2.71,$2.476-$2.446, $2.392,$2.258-$2.253, $2.219
Minor Support:$2.783, $2.638, $2.508, $2.339
Major Resistance: $3.047-$3.053, $3.091-$3.101, $3.19

Yet another attempt to close above the gap and confirm the action with a close above was met with failure. Perhaps that will happen during the expiration but continue to expect a challenge of either the gap area ($3.08 now) with the Dec contract (whether it is closed above that area as Nov expires) as it takes over as prompt.

Major Support: $2.822, $2.71,$2.476-$2.446, $2.392,$2.258-$2.253, $2.219
Minor Support:$2.783, $2.638, $2.508, $2.339
Major Resistance: $3.047-$3.053, $3.101, $3.19