Category: Daily Call

Daily Continuous

Nothing really new after yesterday’s trade as the market continued into the range after a strong start before slight correction. Still believe this is a market with a long term bullish bias but needs to correct and develop a base to rally from.

Major Support: $3.60-$3.584, $3.16-$2.97, $2.727, $2.648,
Minor Support : $3.827-$3.801 $3.742
Major Resistance: $4.00, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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The Process Continues

Daily Continuous

Usually there are short – term trends between that support and resistance but when volatility is elevated those boundaries are defined by high volume highs and lows. For May gas there was a high volume low on 02/18 at $3.628, another on 03/03 at $3.810. It is pretty rare but in both cases high volume highs were traded on the following day at $4.326 and $4.588, respectively. In both cases the combined volumes of those two days is greater than any other two day period. The zone between the lows is definable support, between the highs is resistance. Volume is the energy that drives price higher…or lower. Volume on the day of the price spike to $4.901 was substantially lower than on the days that defined the zone of resistance (discussed in the Daily). The energy to drive prompt gas higher was simply not present, hence the breakout failed. Also note that volume was lacking on 03/27 when May tested the support and the breakdown failed. While, price and volume are doing the right things for prices to eventually move higher, a correcting substantial increase in volume is going to be required in order for that to occur. I stand that the market will need to consolidate and build for that sponsorship to develop and until, it is going to be range bound.

Major Support: $3.60-$3.584, $3.16-$2.97, $2.727, $2.648,
Minor Support : $3.827-$3.801 $3.742
Major Resistance: $4.00, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

Supported Expiration

Daily Continuous

Found it interesting that the May contract went down to the key mid term support at $3.74 before building a rally. Will stay away from this market today and set up some option strategies for the Q2 rally coming in the next few months.

Major Support: $3.60-$3.584, $3.16-$2.97, $2.727, $2.648,
Minor Support : $3.827-$3.801 $3.742
Major Resistance: $4.00, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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Nothing New as Expiration is Upon Us

Daily Continuous

Nothing has occurred that wasn’t discussed in the Weekly and Daily on Monday– so I chose to be quiet. Nothing really happened yesterday that was dramatic or earth shattering to a technical interpretation but I did want to send a quick flag for the expiration– It should hold the March lows of $3.742 and if it breaks that level we may see a brief test of the major support sub $3.60 with the April contract or the May contract as it takes over as prompt.

Major Support: $3.60-$3.584, $3.16-$2.97, $2.727, $2.648,
Minor Support : $3.827-$3.801 $3.742
Major Resistance: $4.00, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

Weak Close Suggests More Down Side

Daily Continuous

While the down side movement has now created “mixed” signals to the bias going forward, the move during March still embraces a more bullish environment for gas prices longer term. As far as April goes this week the headline says it all. The way market has finished the last couple of weeks, does not instill supreme confidence of a rally into the expiration — but rather the opposite.

Major Support: $3.60-$3.584, $3.16-$2.97, $2.727, $2.648,
Minor Support : $3.827-$3.801 $3.742
Major Resistance: $4.00, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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A Break Below $4.00

Daily Continuous

Price action broke through the $4.00 level which has been a formidable area of support for nearly a month– now what? I am going to consider this with a “neutral” bias and will wait to see confirmation today. Want to look at the volume and open interest levels from this week and relate them to the price declines. What happened a few days back (higher highs on higher volume and increasing open interest) should not be discounted to the semi-weekly reversal mentioned in my Weekly on Monday. The market (as it does quite often) is sending conflicting technical signals.

Major Support: $3.16-$2.97, $2.727, $2.648,
Minor Support : $3.827-$3.801 $3.742
Major Resistance: $4.00, $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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Consolidation

Daily Consolidation

No Daily yesterday as there was no change to comments from the day before– wanted to just make the comment today (even though nothing changed) that the market wants to test resistance after a very weak challenge of support. The fact that the challenge was so weak is important to understand that there seems to be an underlying support for prices above $4.00. Time will tell.

Major Support: $3.16-$2.97, $2.727, $2.648,
Minor Support : $4.00, $3.827-$3.801 $3.742
Major Resistance: $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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Testing Low End of Range

Daily Continuous

Mentioned in the postings yesterday that the market would likely develop the range for trade and it seems to be setting the low end. From the short side it may correct to the $3.70 area but would not be aggressive chasing that level. The low extension may provide the opportunity to clear some put positions– other than that — play the levels in the range.

Major Support: $3.16-$2.97, $2.727, $2.648,
Minor Support : $4.00, $3.827-$3.801 $3.742
Major Resistance: $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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Prices Rally to Run Out of Buyers

Daily Continuous

Big run up in the Sunday night market only to find ample selling when the full market opened. Last week’s behavior was informative (discussed in the Weekly section) but did not totally resolve the near term direction (nor the definitive bias component). We now sit in a new range market that will lead us either to consolidation, confirmation (bias), or capitulation (breaking the low end of range).

Major Support: $3.16-$2.97, $2.727, $2.648,
Minor Support : $4.00, $3.827-$3.801 $3.742
Major Resistance: $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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Storage Release Provides Bounce

Daily Continuous

The reversal was relieved momentarily by the storage release but by late in the day had increased the declines. Today will provide the key numbers for the weekly close number and what implications may be for the future. Range is the key for traders.

Major Support: $3.16-$2.97, $2.727, $2.648,
Minor Support : $4.00, $3.827-$3.801 $3.742
Major Resistance: $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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