Category: Daily Call

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

Last week provided a great opportunity to learn about gaps as I discussed in the Weekly Section on Wednesday… It is important to realize that the gap closes, but it is critical that the market confirm that by a daily close beyond and even more important, from an enforcement standpoint, to have a weekly close beyond the gap. Neither occurred last week and we witnessed the market reject the gap closing as the week went on. I want to thank the folks who sent me emails regarding the accuracy of the Weekly update and hope it was a profitable event.

Added to the discussion about the market going into expiration and how the market looks like from a technical standpoint in the Weekly section and will not restate what is already written. Prices have three days left of the November contract and there is still 21,000 contracts open (historically a little high) so there may be some additional volatility. My interpretation of the market remains the same as stated in the Weekly last week– expect the Dec contract to weaken toward the gap area ($3.066) in the coming week. Where Nov goes is anyone’s guess- it may chase Dec but I have to believe there are some option positions around $3.00 that may or may not have been closed last week, ensuring the potential volatility.

The market continued higher during the trade day only to weaken towards the end and close the day at the low side of the gap range. Mentioned earlier in the week, play the range and keep the stops tight. Need to see how this plays out today– may make several technical event today.

Major Support: $2.983, $2.476-$2.446, $2.392,$2.258-$2.253, $2.219
Minor Support:$2.79, $2.638, $2.508, $2.339
Major Resistance: $3.047-$3.053, $3.101, $3.207

Price surprised me as they closed the gap going back to 2019 that sets up a new world (see Weekly section). Key to remember that the market did not close the session above the gap (technical technicality) and therefore has to be questioned. Seems like a good area to sell with stops just above as a low risk area if you are so inclined, but be careful with Dec as it showed some strength but did not join Nov in a new high which brings a certain amount of doubt to the whole daily move.

Major Support: $2.476-$2.446, $2.392,$2.258-$2.253, $2.219
Minor Support:$2.79, $2.638, $2.508, $2.339
Major Resistance: $3.047-$3.053, $3.101, $3.207