Category: Daily Call

Consolidation With In the Range

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The storage report provided little or bias impact so prices spent most of the day consolidating in a tight range. As suggested a few weeks ago — this may be as exciting a trade as Natty will give us for a while.

Major Support: $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.38-$2.26, $2.17
Major Resistance$2.83, $3.00, $3.536, 3.59

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Declines Extend

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In the Weekly section on Sunday — I expected a decline to be retesting lows around $2.69 — well I missed that decline by more than $.10. Now what – perhaps additional declines to $2.47 may occur but they are likely to be brief. My expectations are that the low end of the new range should be completed (near term)– from which prices will rally back to test resistance.

Major Support: $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.38-$2.26, $2.17
Major Resistance$2.83, $3.00, $3.536, 3.59

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OK – Support Zones Tested

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What can I say — my expectations were a day early and I got my test for support a day later than when I suspected. Regardless, the market is defining the upcoming range that it will likely trade within during the next couple of weeks.

Major Support: $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.74, $2.38-$2.26, $2.17
Major Resistance $3.00, $3.536, 3.59

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Working Through the Kinks

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Prices did not find the weakness I was looking for yesterday — though there was a slight decline but not achieving what I was expecting. They did find a solid bid and ran that into the close and in the late market. Maybe establishing the low end of the new range will take some time in order to work through some support zones. Currently, prices seem to want to test the high end of the range per my Weekly section yesterday.

Major Support: $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.74, $2.38-$2.26, $2.17
Major Resistance $3.00, $3.536, 3.59

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A New Range Likely to Develop

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With last week’s bias change (see Weekly section for details), it is likely that the market will try and redefine a new near term range for the September contract between $2.67-$3.01. Would trade this range accordingly for the upcoming week or so. Remember that the Labor Day weekend is historically a weak period for prices (either before or just after) so adjust expectations accordingly. Several of you have asked about the upcoming winter prices and hedging ideas – while I don’t publish them in the web site — I may provide some analysis about the winter strip later in the week.

Major Support: $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.74, $2.38-$2.26, $2.17
Major Resistance $3.00, $3.536, 3.59

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On Cue

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My discussion and expectations were accurate, as prices retraced the previous gains and tested (closed) within the area of resistance that had held the market gains for last few months. Key question remains does the new support zone (old resistance) hold the declines like it held the gains. My best guess is the the market will be forming a new range with the new support zone being defined in the near term.

Major Support: $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.74, $2.38-$2.26, $2.17
Major Resistance $3.00, $3.536, 3.59

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Breakout

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A little surprised that the break out to the highs from Feb occurred this early in the September prompt (was expecting it after Labor Day) but perhaps that timing will provide the next leg in the current run. Nevertheless, yesterday provided the proof of what has been suggested here for a couple of months – that a series of higher highs and higher lows, is signalling the gradual demise of the bear market in 2023. What is next — storage report will be interesting to watch what occurs after the gains of yesterday — but my expectation is a retracement of the gains during the trade and a test of support provided by the old range.

Major Support: $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.836-$2.81, $2.38-$2.26, $2.17
Major Resistance $3.00, $3.536, 3.59

This Week It Is the High End

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Last week the market tested the low end of the range and closed the day just off the lows– this week prices are testing the high end of the range and close yesterday just off the highs. Explained last week that the price action was great for the traders and it continues to be. My only concern is when does the high end break out or when does the low end break down. For now .. it is the potential break out to higher prices.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support:$2.52-$2.47, $2.38-$2.26, $2.17
Major Resistance $2.816-$2.836, $3.00, $3.536, 3.59

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Price Action Decides to Challenge Resistance

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It didn’t take long for the market to rebound and run a little off of last week’s test of support and start to challenge the the near term resistance. Did not expect the run as quick nor as decisive as it was– but here we are. Find it interesting that some of the pundits have started to adjust commentary to more bullish aspects of the market (heat continuing, Russia cutting gas to Europe and storage still at a surplus to averages — now later has become a concern) but if my suspicions are accurate — you will see a test of last months highs coming.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support:$2.52-$2.47, $2.38-$2.26, $2.17
Major Resistance $2.754, 2.816-$2.836, $3.00, $3.536, 3.59

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Range Continues to Hold

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Prices stayed in the near term range (discussed in the Weekly Section) last week and I will expect the continuation of this pattern for the near term. Know it is boring and not a lot of revenue potential but it can provide good opportunities selling premium in the options market.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support:$2.52-$2.47, $2.38-$2.26, $2.17
Major Resistance $2.754, 2.816-$2.836, $3.00, $3.536, 3.59

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