Mentioned yesterday that the it was unknown if the Q2 high was established and that upcoming trade would help define. If prices can’t set a higher high than the May high after yesterday’s gap opening and $.70 rally it is going to miss a great chance to break out above. Not many resistance zones above that level until you hit $10 and above. Declines will need to close the gap from yesterday at $8.73.
Major Support:$$8.73, 8.283-$8.24, $8.12 Minor Support: $8.065, $7.69,$7.36, Major Resistance: $9.447, $9.60
Last weekend we came back prices were down big time — conforming to the historical Holiday weakness trend- now a week later and prices are back up challenging the highs from last Tuesday/Monday. As discussed in the Weekly section this volatility will continue to be prevalent for the coming summer months. Fundamental folks will blame it on the weather or the war — but notice that the prices on the futures in Dutch and London contracts are down– so ignore the “noise”.
The market will find the top on this bull run and not sure where but I don’t believe the May high is the calendar top and the jury is out on whether it is the Q2, seasonal high (similar to the 2008 run).
The rally ran low before the storage release just below $9.00 and the collapsed after the public release. Found some brief support sending prices back up above $8.70 only to decline through the close. This week will provide some direction as discussed in the Weekly section and perhaps a serious test of support around the earlier low at $8.11 will get tested.
Major Support:$8.283-$8.24, $8.12 Minor Support: $8.065, $7.69,$7.36, Major Resistance:$8.916, $8.996, $9.60
Not even a hard test of the support line drawn from the March, April and May low of continuous prices– but prices rallied significantly off of the weak test, creating a near term support for the monthly range. Suspect prices to rally up to the $9.00 area (early May high)– not convinced it will chase the calendar May high, created during expiration.
Major Support:$8.283-$8.24, $8.12 Minor Support: $8.065, $7.69,$7.36, Major Resistance:$8.916, $8.996, $9.60
The Holiday weakness declines expanded the 5+% decline, taking prices down, getting near the trend line support (March and April lows in the chart above) that has been mentioned here for a while. The key is a break below that holds on a daily closing basis. A test and rally from will provide additional gains but a break down on a closing basis will likely create a test of the $8.00 area and just below.
Major Support:$8.283-$8.24, $8.12 Minor Support: $8.065, $7.69,$7.36, Major Resistance:$8.916, $8.996, $9.60
Friday’s trade provided a little weakness and was extended in the light Holiday trade on Monday. Go into expectations and the upcoming trend that may continue and “rhyme” with the happenings in 2008 as well as other potential outcomes — but this week and next are going to provide some valuable insight as the the early summer action. The declines from the high’s last week ($9.40) down to the low on Friday ($8.285) have already met the average spread surround the Holiday period and with the market opening lower late Monday night– perhaps the Holiday related low has not yet been achieved. Continue to expect market volatility in the upcoming week and would be keeping trade horizons short as recommended for nearly a month.
Major Support:$8.548, $8.32, $8.283-$8.24 Minor Support: $8.065, $7.69,$7.36, Major Resistance:$8.916, $8.996, $9.60
Though collapsing at the end of trade– the expiration was well bid as prices were $1.00 higher than last Friday following three up days and only one declining day (expiration day). July takes over as prompt and history leads to the expiration of some sort or retracement before or just after the Holiday. Some how — I don’t see traders selling into the Holiday weekend, but trade is likely to be light regardless.
Major Support:$7.663, $7.50., $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187 Minor Support: $7.722- $7.69, $6.00, $5.063, $5.04, $4.88, $4.60-$4.557 Major Resistance: $8.996, $9.60
The trade got they were seeking as prices jumped over $9.00 and got the short covering in the option expiration market. The market could not hold all of those gains during the trade as once the shorts were out — not a lot of buyers remained. Expiration is upon us and who has a clue as to what will happen as fundamentals haven’t changed in 3 weeks and the technical targets just seem to get run over.
Major Support:$7.663, $7.50., $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187 Minor Support: $7.722- $7.69, $6.00, $5.063, $5.04, $4.88, $4.60-$4.557 Major Resistance: $8.996, $9.60
Per the commentary yesterday — traders tried hard with the classic (now days) early morning rally up to $8.93 only to retrace when the rest of the trade got into the office. Not giving up on the concept that the trade is going to utilize the history of expiration’s to break above the resistance levels just below $9.00.
Major Support:$7.663, $7.50., $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187 Minor Support: $7.722- $7.69, $6.00, $5.063, $5.04, $4.88, $4.60-$4.557 Major Resistance: $8.996, $9.60
Spoke about the trends in the expiration process in both the Daily and Weekly sections– had no clue that the market would further the trend another month (in the first day)– but it seems like that is the idea. Cannot jump on the July or August contract at these levels currently, though. Not enough volume, the ATR (discussed in the Weekly) is in an historical danger area, and the trade around Memorial Day Holiday, has shown weakness either side of the Holiday, historically. That does not prevent aggressive folk from taking a position during the day only to leave at resistance. That said, the move yesterday does provide the question of whether the trade is setting itself up for a break out above the calendar May high, either during expiration or just after as the July contract is trading at an $.08 premium to June. Should a break above occur– let the short covering occur — don’t chase– wait for the Holiday weakness to provide better opportunities (if it does). If it breaks down chose the level you are comfortable with to initiate length.
Major Support:$7.663, $7.50., $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187 Minor Support: $7.722- $7.69, $6.00, $5.063, $5.04, $4.88, $4.60-$4.557 Major Resistance: $8.996, $9.60
