Category: Daily Call

As explained last week, the market seems to be testing a narrowing range between support and resistance. Last week provided some indication of bias as discussed in the Weekly area. Here we sit at the low (support) side of the range and prices seem to be gaining on Sunday night. Read the Weekly for expectations for the week.

Major Support: $3.734, $3.63, $3.584-$3.522
Minor Support:
Major Resistance: $3.91-$3.93, $4.02, $4.127, $4.20

Not much to say post storage release– prices continue to consolidate and some patterns have started to develop during the trade day which I will go into over the weekend. Unfortunately, the prices remain in the middle of the recent range developed. Continue to play the range. Heads up — the Daily will be available on Dec 20, 21 and 22 there will not be a Daily on the 23rd through the Holiday weekend. Will update on the Daily and Weekly report out on the 27th.

Major Support: $3.734, $3.63, $3.584-$3.522
Minor Support:
Major Resistance: $3.91-$3.93, $4.02, $4.127, $4.25 $4.61, $4.67, $4.735, $4.825, $5.10

Prices extended to the high side of the range but did not get near the true resistance area. Volume continues to decline during this consolidation phase. It should be considered as a consolidation process after the tremendous declines and need to be digested. The results from this phase will likely define the bias for the near future. Will be discussing the trends of expiration for the last 9 months in the coming week, as we are headed to lighter trade, due to the Holidays, and the market could become subject to volatility.

Major Support: $3.734, $3.63, $3.584-$3.522
Minor Support:
Major Resistance: $3.91-$3.931, $4.02, $4.127, $4.25 $4.61, $4.67, $4.735, $4.825, $5.10

The declines tried to test support but could only get down to $3.686 and did not quite get to support before finding buyers. Why did that happen with forecasts remaining bearish through the day (fundamental folks told me)? Guess Mother Nature (or the forecasts that claim they can predict) flipped during the late morning? What ever– you fundamental traders can be delusional at time. Think a nice range is developing here between $3.63-$4.085– play it accordingly.

Major Support: $3.734, $3.584-$3.522
Minor Support:
Major Resistance: $3.91-$3.931, $4.02, $4.127, $4.25 $4.61, $4.67, $4.735, $4.825, $5.10

On script, the open was stronger, only to run into the selling on the high side of the gap. The declines were impressive considering that both the Dutch and Britain contracts closed at the highest levels since early October (10% daily gains). Perhaps we can put that garbage, surfacing amongst fundamental traders last fall, to rest. Never understood the relationship, as the US has a finite amount of LNG export capacity and has been running near those limits most of the fall (regardless of the Dutch price). Fundamental folks always need some sort of narrative to explain the rallies or the declines– usually a useless effort. Now we have another narrative, this time about the weather– yup — Chicago beaches will be open for the Holidays. Wonder how fast that will change? As mentioned a couple of weeks ago, the bias in this market is bearish and selling (or shorting) rallies is critical for economic success. Not saying you can’t buy the dips — support areas– but until the market does something to change the bias this should be the strategy.

Major Support: $3.734, $3.584-$3.522
Minor Support:
Major Resistance: $3.91-$3.931, $4.02, $4.127, $4.25 $4.61, $4.67, $4.735, $4.825, $5.10

Discussed last week’s action in the Weekly area of the web site so will not go over here. Each day last week after the large Monday drop– prices attacked the gap left from the Monday open and would expect the same behavior today. One of my fundamental traders said something to me last week which was basically– forecasts could not get any more bearish so any changes will likely add to demand forecasts. The remainder of December could get very interesting with open interest low (occasionally, an indicator of a bottom forming) and the summer ’22 strip looking stronger than the winter months (having closed to a meager $.13 discount to prompt) suggests the potential for a counter trend run. Did I mention that expiration of the last nine months have had rallies.

Major Support: $3.734, $3.584-$3.522
Minor Support:
Major Resistance: $3.91-$3.931, $4.02, $4.127, $4.25 $4.61, $4.67, $4.735, $4.825, $5.10

Prices made another rally at the gap from Monday but to no avail. This week sets up for an interesting open next week as prices could open with a gap up (creating an island reversal) or another hard sell taking prices down and likely putting the Jan contract below the upcoming summer for 2022. The set up will come today as last Friday traded stronger only to give up the gains through the day and telegraphed what the mood was likely to be on Monday. Technical points continue to suggest the mini-range of the week with the high end the gap from Monday. I remain on the sidelines.

Major Support: $3.734, $3.584-$3.522
Minor Support:
Major Resistance: $3.91-$3.931, $4.02, $4.127, $4.25 $4.61, $4.67, $4.735, $4.825, $5.10

Prices started to close the gap from the open on Monday, climbing into the low end of the gap at $3.931. This closes the first $.05 of the total gap. Would not recommend buying into or selling into this move– rather take a day and a storage report to confirm the trend, whether that trend is a continuous decline or the start of a rally that may take prices through the gap and higher.

Major Support: $3.734, $3.584-$3.522
Minor Support:
Major Resistance: $3.91, $4.02, $4.127, $4.25 $4.61, $4.67, $4.735, $4.825, $5.1

If you are a bear and thought you were going to get another $.40 decline after the last $1.90+ then grow up or stop trading. Now the market should hit a consolidation trade for a period of time. The fundamental folks all say the declines are because of forecasts. Guess its going to be 70 in Chicago all winter— you know we should address this man made global warming — it having an impact on trading. Whoa, this kinda of sarcasm got me in trouble with a few of you last fall– and that too was about forecasts. So let me digress to what I understand — prices will not go to zero and trees don’t grow to the sky. Time to chill for a while– did I mention that gap??

Major Support: $3.734, $3.584-$3.522
Minor Support:
Major Resistance: $3.91, $4.02, $4.127, $4.25 $4.61, $4.67, $4.735, $4.825, $5.109-$5.175, $5.339

That is how natural gas likes to eliminate support zones — wait for the weekend and open below the support zone and force a daily and weekly gap in the charts. So it goes when trading gas — we now know the upper boundary for resistance near term and that would be the gap. The support goes back to last summer/spring as prices consolidated for a week around $3.584-$3.522. The market has entered over sold category but we saw that it can stay in the extreme zone last fall as prices were over-bought.