Category: Daily Call

As Thought

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As discussed yesterday, the market seemed to be running out of sellers and is now consolidating on the next extension of declines and/or a correction with in the range established from the early Dec lows.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $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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Gap Lower — Too Aggressive

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Prices opened the day and week with a gap and then proceeded lower before spending the remainder of the day gaining back some of the losses. The open may have been a tad aggressive and per behavior last month, the market ran out of sellers. Not expecting a cover rally but the market is likely going to consolidate the recent declines.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $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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Look Out Below

Daily Continuation

Discussed the technical damaged suffered by prompt gas this past week, in the Weekly section– from there I can propose some of the following trade ideas — expect February settlement to be discount to January ($2.621). Though prices in the late Sunday trader are already challenging- expect March to find support/sponsorship between +/- $2.100 (March’s December low was $2.098, the low of a daily reversal) and $2.240 (the past week’s low was 2.237). As mentioned in the Weekly section–expect the historically important January low to be traded during the two days following February expiration. Failure of March to rally during the coming week will suggest a strong possibility of a test/violation of the continuation December low ($2.235).

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $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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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

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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

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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

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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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