Category: Daily Call

What is with this– all you fundamental folks are telling me weather forecasts are bearish for November and Storage will be HUGE at the end of the month– what gives with a $.50 rally. Oh- one reader blamed it on the early and Sunday trade and not the general market– Huh– yo fool — if it was so false and misread bearish bias, why did it not sell back in the full market– seemed like a great place to put shorts on. I digress– no clue why the rally but will mention that the market had declined for the month of October — and prices will not go down for ever in spite of some of your wishes. Would look to sell the gap until it closes above it– then flip and length for the top side of a new range. If it does close above it make sure you have some shorts out there.

Major Support: $4.948, $4.903, $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 last Friday, that with the bearishness associated with the Nov trade — I fully expected the declines to continue and eat the premium associated with the Dec contract. While some of the premium was devoured, the market left a fair amount of meat on the bone (so to speak). Now, much to my surprise with all the bearish bias — prices are up in Sunday night trade? Have little explanation for this behavior, except as mentioned in the Weekly section — sellers may have dried up.

Major Support: $4.948, $4.903, $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,

Some slight convergence between the Dec and Nov contract as the Nov contract expired. Still left with a significant gap and would expect that the differential will be closed in the near future due to the recent bearish bias in the last month. Would expect that buying the the lows of the last month down to $4.90 with tight stops a potential strategy or selling the current levels down is also an alternative, but need to be careful as the strength in the Dec contract during the slaughter of Nov raises concern.

Major Support: $4.903, $4.716, $4.705-$4.68
Minor Support
Major Resistance: $6.314, $6.456, $6.74, $7.18, $7.532, $7.71-7.75, 8.021,

Prices retreated a little during options expiration, but nothing conclusive was determined. The market is defining a “new range” and how it determines the high side and low end has some development yet. At any rate, and expiration on the same day as the storage report is likely exciting.

Major Support: $4.903, $4.716, $4.705-$4.68
Minor Support
Major Resistance:$5.32-$5.37, $6.314, $6.456, $6.74, $7.18, $7.532, $7.71-7.75, 8.021,

While the spread came in a couple of pennies at the time of this writing, I am still concerned about adding positions, whether long or short, while the intentions of the market deciding on the differential (closing or ignoring until Dec becomes prompt). Need to be careful and cautious during this period. There are a couple of different ways this game can turn out from a technical perspective and they revolve around the highs of last week, which coincides with the gap from last week.

Major Support: $4.903, $4.716, $4.705-$4.68
Minor Support
Major Resistance:$5.32-$5.37, $6.314, $6.456, $6.74, $7.18, $7.532, $7.71-7.75, 8.021,

As alluded to, the over sold condition of the market extended early Monday morning to find support and develop a counter trend rally. Nothing major but a reversal day was over due for this market. How far does it proceed is anyone’s guess during the expiration process. After 5 consecutive declining days, it should be expected that prices rebound 33-50% of last weeks declines. More interesting to me is the dramatic and large spread between the Nov and Dec contract. During last week’s decline this differential got large (see chart below).

That differential blew out last week, expanding 25%. What happens— does Nov chase Dec during expiration of does Dec collapse and give up the premium after becoming prompt. My best guess is a combination of both.

A few days ago I mentioned that in spite of the declines the market remained in a “bullish” bias. That assessment was made due to the fact that price action had not closed below the lows from last July (ending a series of higher highs and higher lows). That came to an end yesterday as the market broke below the previous lows only to rally and close on the July lows. Mentioned a week ago that the run had encountered serious “technical” damage when prices broke though the support from $7.40 and was confirmed last week and on Monday when prices broke down below $6.40. It has been a sell the rally all month (Oct) and will continue to be so until the over-sold bias gets corrected. That correction may be very ugly when it occurs for the bears.

Major Support: $5.38-$5.35
Minor Support $5.40-$5.45
Major Resistance:$6.314, $6.74, $7.18, $7.532, $7.71-7.75, 8.021, $9.05-$9.12,$9.35,

The low end of the range continues to develop as prices lost another $.30+ and show little signs of stopping. Last week had weakness going into the storage report that everyone knew was going to be bearish and it was so prices rallied. HuH. Have no idea what the expectations are for tomorrow but I can tell you the market seems to be expecting a massive injection, combined with no winter, combined with price caps in Europe — folks we’re headed to $0.00 (pardon my sarcasm but some of my relentless bear traders are convinced). Sell the next rally or buy this dip — just not sure where you want the stops except for the lows from July ($5.35-$5.38).

Major Support: $5.38-$5.35
Minor Support $5.40-$5.45
Major Resistance:$6.314, $6.74, $7.18, $7.532, $7.71-7.75, 8.021, $9.05-$9.12,$9.35,

Not sure what you fundamental folks are expecting on Thursday, but the “big” number may finally let us define the low end of the upcoming range trade. Should it be around $5.65 that would set up the potential for a nice $.75 range that will provide solid trading gains. Market is not in the extreme zones in the market momentum indicators which can announce a “change” in direction (though briefly). Be patient and let the market define itself. Believe it or not, dating back a year — the market continues to have a long term bullish bias — granted that is hard to accept after the last $1.00 decline.

Major Support: $5.623,
Minor Support $5.548, $5.40-$5.45
Major Resistance:$6.314, $6.74, $7.18, $7.532, $7.71-7.75, 8.021, $9.05-$9.12,$9.35,