Category: Daily Call

Slight Additional Weakness

Daily Continuous

After all the drama from the combined Monday/Tuesday trade the action and volatility slowed yesterday as the prices entered the comfortable range trade of the last few months. This behavior should likely continue for the next couple of trade days. Will be interesting to watch the next two storage reports have any impact on price action.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.694, $2.62, $2.47, $2.38-$2.26, $2.17
Major Resistance $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

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Tad Dramatic

Daily Continuous

That was a bit of drama going down when no one wants to buy– now we have a whole new market in the same old range that held the market in December. Lets see where this all leads us.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.62, $2.47, $2.38-$2.26, $2.17
Major Resistance $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

Perhaps the Market Showed Too Much Strength

Daily Continuous

Go into last week’s trade and the results in the Weekly Section–From a daily perspective the market is confirming the lack of follow through in the light Monday trade as prices rejected any type of follow-through of the rally. One element discussed in the Weekly section is the historically extreme premium the Feb has to Mar. Check out the chart below and you will see that the extreme variance is starting to narrow.

February less March Contracts

Mentioned in the Daily last week that a source of the short covering was the Feb contracts being bought to cover the short — Then I mentioned that the short covering rally had a slight gain in open interest– the differential can’t confirm that the reason for the gain was those traders who were covering shorts “rolled” them into March but looking at the the breakout in the differential spread may be an indication. If you cover a short but roll it to the next month there is no change in open interest, but you have sold the next month — putting pressure on that contract. This will be interesting to trade in the coming week as March may gain to narrow the differential while Feb declines.

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Is It Going To Consolidate Gains?

Daily Continuous

Interesting day trade as prices firmed after open interest fell on Wednesday. It may be that the trade is starting to develop a more positive bias it will need some additional gains — however small– in the near term.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.62, $2.47, $2.38-$2.26, $2.17
Major Resistance $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

Suspected This

Daily Continuous

Want to apologize for any issues with yesterday’s Daily — (there was only one complaint) — but it reminds me to remind all of you that if you don’t have a Daily in your email — it maybe an email issue — so be sure to log in and check the website. Unless I am ill there should be a posting.

On to the market– once again a big short covering event ran out of steam there were no follow through buyers to build on the price. Not over yet as I noticed that total open interest had a small gain yesterday (according to the CME) while the February contract had significant declines in open interest. Perhaps the short covering was just rolling forward and selling a differed contract but covering the Feb exposure. Time will tell as the week wraps up.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.62, $2.47, $2.38-$2.26, $2.17
Major Resistance $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

THAT Is A Short-Covering Rally

Daily Continuous

The short covering started on Monday as open interest decreased as prices rose, but yesterday was the big run and I don’t have confirmation from the CME– but I expect a significant amount of short open interest left the market. It really means little to the trader as I am waiting to see gains in open interest as prices rally. We have witnessed these types of rallies in the last year only to have prices reverse back lower once the short were eliminated. From my perspective — thankfully, I had stops in just above the resistance area mentioned yesterday– so damage was minimal. Now I want to wait and see how much leg this rally can have.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $3.00, $2.87, $2.62, $2.47, $2.38-$2.26, $2.17
Major Resistance: $3.16, $3.48, $3.536, 3.59, $3.65

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Solid Short Cover Based Rebound

Daily Continuation

It is time to watch the rubber meet the road. The recent rally has been identified as the cold and extended cold coming, forcing some shorts to cover– but watching trade while watching the Championship game– I am witnessing some serious selling taking prices off the high $2.90’s. Have no idea as to the longer range forecasts and really care not. The market is at the high end of the resistance and will be looking at selling resistance.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.62, $2.47, $2.38-$2.26, $2.17
Major Resistance $2.786-$2.865, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

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Break Above Resistance Continues

Daily Continuous

Prices broke above near term resistance and held strong through the end of the week. Due to the strength, I expect prices to remain firm today regardless of the late Sunday weakness showing the start of declines, regardless, the market is likely to remain range bound this coming week.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.47, $2.38-$2.26, $2.17
Major Resistance, $2.786-$2.865, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

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Slight Break Out Above Resistance

Daily Continuation

Not sure you want to load up the bank on this slight break out above the recent range. The market trades on the weather reports so any long term positioning is rather risky. Short term (daily trades) can be profitable on a very short horizon.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.47, $2.38-$2.26, $2.17
Major Resistance$2.62, $2.786-$2.865, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

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New Year, Same Old Range

Daily Continuous

Prices started with a bump early then just fell back into the old range– this market needs an issue to catch the traders eye — one way or the other.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.47, $2.38-$2.26, $2.17
Major Resistance$2.62, $2.786-$2.865, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65