Category: Daily Call

Memorial Day Weakness Continues

Daily Continuous

Prices continued lower on the EIA report, even thought the injection was bullish compared to expectations. Looking at other commodity charts, I was struck with the recent rally in crude (WTI) and the monotonous decline in natural gas — it took me back to the fall of 2018 when trading houses were buying crude and offsetting that position with selling Natty. One got caught and pummeled into bankruptcy. Not sure if this is happening, but for the third consecutive day, I have heard suggestions in the market. Be aware of the potential– but continue to work the range.

Major Support: $1.611-$1.59, $1.555-$1.519
Minor Support: $1.649
Major Resistance: $1.82-$1.849, $1.873, $1.90
Minor Resistance: $2.029

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Weakness Into Bearish Report —- Again

Daily Continuous

Pardon my sarcasm but for the last few weeks the Wednesday trade has been weak on low volume to set up for the storage report (which I hear, is going to be bearish — again). The question remains, do folks sell into the report only to run out of sellers? From a technical trade perspective continue to trade the range and sell the rallies (prices in the high $1.80’s and above), OH and buy the dips (low $1.60’s and below). History suggests weakness into, or just after, the holiday while the higher daily volume following the gaining price days.

Major Support: $1.611-$1.59, $1.555-$1.519
Minor Support: $1.649
Major Resistance: $1.82-$1.849, $1.873, $1.90
Minor Resistance: $2.029

Trade Consolidates Monday’s Gaines

Daily Continuous

Prices consolidated the gains from Monday and traded in a tighter range. Perhaps, the trade is building positions to move higher or developing positions to test support, but evidence either way is missing now. Traders would be wise to wait for clearer signals to initiate substantial new positions. Continue to play the book of the higher end of the range to be found before the historical trend of weaker prices either side of the Memorial Day holiday take hold.

Major Support: $1.611-$1.59, $1.555-$1.519
Minor Support: $1.649
Major Resistance: $1.82-$1.849, $1.873, $1.90
Minor Resistance: $2.029

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Unexpected Pop

Daily Continuous

Wasn’t expecting that kind of pop in prices, regardless of the history of the June contract rising into weakness around the Memorial Day holiday. Some of my Candlestick traders tried to explain why but they are well above my knowledge of Candlestick patterns (beyond Doji patterns) and therefore I will not bore you with the details. Facts are the June caught a bid after a terrible trade last week. Guess where we are — yup- right in the range trade that has worked for the last few months. Play accordingly.

Major Support: $1.611-$1.59, $1.555-$1.519
Minor Support: $1.649
Major Resistance: $1.82-$1.849, $1.873, $1.90
Minor Resistance: $2.029

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Minor Bounce Off of Support Test

Daily Continuous
Spot June Contract

Got to the internet to update but not a lot to explain other than range trading and from early Sunday trade, prices want to move higher. Doubt it will last long as the rallies are still selling opportunities. Still concerned about the limitations of trading discussed in the web site regarding the trading house. Play the range — but be advised — the trading house closing the potential of trading the prompt (10 days in advance of expiration) is very disturbing to this trader.

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Prices Find Support

Daily Continuous

That was a rebound off of the last week of selling, have little explanation other than for the last three months the price action has followed a similar range game. Test the resistance (fail) then go down and test the support (fail) so we find our market in the range trade game. It can be lucrative but patience is required. A note for you fine subscribers– it is likely that there will be no Daily on Monday. The goal is to due the longer term analysis tomorrow when the market closes. Be sure to check into the website for those insights.

Major Support: $1.611-$1.59, $1.555-$1.519
Minor Support: $1.649
Major Resistance: $1.82-$1.849, $1.873, $1.90
Minor Resistance: $2.029

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Trend Line Violation Opens Door For Declines

Daily Continuous
Spot June Contract

Once the trend line in the Weekly (see Web) and the spot June, the trap door was open, and some liquidation occurred. We may be similar in trade to 2016 which had an uncommonly early May Q2 high, but with the volume being rather anemic for this type of activity do not believe the high is in so close to the establishment of the Q1 low (just six weeks earlier). The trade does look like it wants to go down and test the expiration range low from the May expiration at $1.59. Would expect the area between the March low of the June contract ($1.649) and the previous mentioned low, to find some buying interest.

Major Support: $1.649-$1.611-$1.59, $1.555-$1.519
Minor Support:
Major Resistance: $1.82-$1.849, $1.873, $1.90
Minor Resistance: $2.029

Great Opportunity – No Follow Through

Daily Continuous
June Spot Contract

The market lost a wonderful chance to break through the support provided by the expiration of the May contract around $1.80. Perhaps it will occur today or Wednesday but I would expect it in the near term. The June contract has now closed below the trend line off of the early April and late April lows for two consecutive days. If a break below is to happen, now is the best time. Continue to trade the range the market is providing.

Major Support: $1.82, $1.611, $1.555-$1.519
Minor Support: $1.794, $1.78-$1.765
Major Resistance: $2.062,$2.08-$2.102–$2.108,$2.139-$2.16, $2.255
Minor Resistance: $2.029

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Extension Downward –Testing Trend Line Support

Daily Continuous
Spot June Contract

In a matter of four days, natural gas prices tested the 200 day SMA for both the continuous and spot June only to succumb to selling pressure taking prices down to trend line support of the lows in the prompt contract. From a trading perspective (understanding that the market is still in a range trade environment) you don’t get these opportunities very often. With close on the lows Friday, one would expect additional declines to the previous range game between $1.59 and $2.00. It is unfortunate that price could not garner enough support between $1.91 and $2.02 to effectively flip the bias. All I can say is patience.

Major Support: $1.82, $1.611, $1.555-$1.519
Minor Support: $1.794, $1.78-$1.765
Major Resistance: $2.062,$2.08-$2.102–$2.108,$2.139-$2.16, $2.255
Minor Resistance: $2.029

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Additional Declines – No Dip Buyers Yet

Daily Continuous

Not surprising to find additional declines post the storage report. The volume the last two day has been lighter on the declines than the short covering run early in the week, which should be expected. Perhaps the market is testing support and consolidating the gains made earlier in the week, but in reality the prompt is where it was post May expiration. Lots of volatility and no clear directional bias.

Major Support: $1.82, $1.611, $1.555-$1.519
Minor Support: $1.794, $1.78-$1.765
Major Resistance: $2.062,$2.08-$2.102–$2.108,$2.139-$2.16, $2.255
Minor Resistance: