Category: Daily Call

Since Labor Day (just before) price action went from positive to negative and this website has explained the declines and potential outcomes of the technical destruction that had occurred. Now, we are faced with a “tipping point”– the market has used the area around $6.41 as resistance (mentioned here) and there has been only one daily “close” above that area on Monday a couple of weeks ago. That rally turned out false and prices quickly confirmed the silliness. That area is the old gap from the massive sell-off in October and has limited gains since. Yesterday was a great opportunity to settle a day above that area (confirming support) but instead basically closed right on it. For any additional gains in price-the market has to show the sponsorship to close distinctly above that resistance and follow through after the settle. Until that happens– the market remains at the high end of the trading range.

Major Support: $5.61-$5.44, $4.716, $4.705-$4.68
Minor Support: $5.47
Major Resistance: $6.41-$6.456, $6.74,$7.00, $7.18, $7.532, $7.71-7.75, 8.021,

Not sure what happened or hit the news wire but prices caught a major bid, rallying $.25 in 30 minutes at the end of the day yesterday. Range trading around $5.80-$5.90 until a whole bunch of folks decided it was wise to be buying. Still trading in the range discussed — I was surprised to see a rally going into a storage report which is likely to show another injection– perhaps the last of the month due on weather this week. Whatever happens — it is again another mystery.

Major Support: $5.61-$5.44, $4.716, $4.705-$4.68
Minor Support: $5.47
Major Resistance: $6.456, $6.74,$7.00, $7.18, $7.532, $7.71-7.75, 8.021,

Price action remains trading around the $6.00 area and some would call it a consolidation phase. Yesterday, continued this trading between $5.85 and $6.20 which is a smaller range that recent volatility. Is the consolidation setting up additional declines– down to the lows from previous declines — or is it developing a base from which a Q4 rally can commence and sustain. Have limited knowledge of any fundamental reasons for either of the potential outcomes so there will be no explanation.

Major Support: $5.61-$5.44, $4.716, $4.705-$4.68
Minor Support: $5.47
Major Resistance: $6.456, $6.74,$7.00, $7.18, $7.532, $7.71-7.75, 8.021,

Wrote about which fundamental factor would influence trade yesterday, little did I know both bias’s would have an impact with the morning trade following the near term cold and then as the morning moved along the bears took over and prices declined back below $6.00 before the close. What’s next is not my in my knowledge capacity –prices have not hit the extremes (though the high side was within $.06) of the range but I remain patient.

Major Support: $5.61-$5.44, $4.716, $4.705-$4.68
Minor Support: $5.47
Major Resistance: $6.456, $6.74,$7.00, $7.18, $7.532, $7.71-7.75, 8.021,

I rarely dive into the “fundamentals” associated with natural gas– but due to the quiet range trade (prices declining back into the range either side of $6.00- discussed here for over a week) wanted to take a shot at the quandary that fundamental traders face. Near term the forecasts are for cold temps and higher demand near term (10 days) but then the models have some warming after that period. So how the folks trade this contradiction – not sure– but the range seems a safer way to trade.

Major Support: $5.61-$5.44, $4.716, $4.705-$4.68
Minor Support: $5.47
Major Resistance: $6.456, $6.74,$7.00, $7.18, $7.532, $7.71-7.75, 8.021,

During the trade day the gap from the Sunday opening held well– it wasn’t until the after market (on light trade) that the market corrected but could not close the gap. I know the timing of that decline and the lack of volume during the decline is very important to at least one of you– the attempt was valiant but still unsuccessful. Perhaps the gap closes today but the damage that was done a month ago (when prices declined) was inflicted to the bears yesterday. Would wait to see where the range gets established before entering significant positions. I have fallen to the flu bug over the weekend so not sure that there will be a Daily tomorrow.

Major Support: $5.61-$5.44, $4.716, $4.705-$4.68
Minor Support: $5.47
Major Resistance: $6.456, $6.74,$7.00, $7.18, $7.532, $7.71-7.75, 8.021,

The chart above was the standard Daily continuous chart that I download on Sat afternoon. Take a look at the same continuous chart after the open on Sunday night below.

It is that type of opening that I cautioned against selling the gap last week and covering that short if the market closed above that gap– which happened last week. Now what — would not suggest that this is going straight to the moon and would expect more of a gradual two steps forward — one step back type of price action. For now, play the run on just a daily basis (not holding for an extended period).

All this week prices moved either side of $6.00. Monday was a big rally to test resistance and failed — Tuesday a big decline (eliminating the rally) to test mid level support only to fail with the $6.00 number just about in the middle. Guesses are there seems to be some sort of equilibrium, in the traders eyes and positions, to facilitate this behavior. The range has held through weather forecast changes, news about the LNG plant a a bearish storage release. That is a lot of bearish headlines and here we sit in a tightening range. Work the extreme ends.

Major Support: $5.61-$5.44, $4.716, $4.705-$4.68
Minor Support: $5.47
Major Resistance: $6.314, $6.456, $6.74, $7.18, $7.532, $7.71-7.75, 8.021,

Heard from some of the fundamental traders yesterday about the one day up — one day down– one day up phenomenon that has ruled trade this week and my suspicions were confirmed that the movement was due to the changes in the coming two week forecasts. Happens frequently in the shoulder seasons for gas and it makes range trading a cautious strategy. I like sticking to the major range and being patient to see if the support and/or resistance areas hold. The other reason for this approach is the stop losses are usually very close. The market was banging up at the gap again yesterday, failing once again– so do we go back and test support? You can make some money in this $.60 range.

Major Support: $5.61-$5.44, $4.716, $4.705-$4.68
Minor Support: $5.47
Major Resistance: $6.314, $6.456, $6.74, $7.18, $7.532, $7.71-7.75, 8.021,

Mentioned earlier in the week that the gap from a week ago Monday is a low risk sell– little did I know that the trade would profit and cover a portion at near term support in one day. I thought I would need to hold that short until the storage report — but that was not the case. Looking at the total volume from Monday, it was well above the recent total volume for the last week of trade days. It will be interesting to look at the volume from yesterday when it becomes final. The rally may well have been associated with short covering — but then did the shorts come back in yesterday? We shall see.

Major Support: $5.61-$5.44, $4.716, $4.705-$4.68
Minor Support: $5.47
Major Resistance: $6.314, $6.456, $6.74, $7.18, $7.532, $7.71-7.75, 8.021,