Category: Daily Call

The failure of May gas to correct before going off the board would be a departure from the pattern of each expiring contract for more than a year…as would a failure to rally into expiration. Expect both to happen over the next eight trading days. Given the strength into Thursday’s pre – holiday close further extension of the rally should not be a surprise, but traders should be alert for a reversal as discussed in the Weekly area. My guess is that a good chunk of last week’s gains will be shed.

Major Support:$6.538, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187, $3.972, $3.734, $3.63, $3.584-$3.522
Minor Support: $6.757, $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $7.346 , $7.427, $7.536

What can we say, the bullish move continues regardless of the over-bought conditions and now is challenging 3 standard deviations over the 20 week SMA. Notice on the chart below, that prices are approaching that extreme level. Can it get there — absolutely but also notice that it does not stay that exposed for very long.

A few of you contacted me in the last week regarding the run and how far it can go– I have tried to explain that it will go as far as the buyers continue to support it — but as I mentioned the last couple of Daily’s, the market will signal the conclusion. Some others have questioned is this the Q2 high– at this point I don’t see this as a culmination of the early summer run – but rather a rally within the med-term bias.

Can not claim that this leg of the run is completed — but yesterday gave a slight idea that the bulls may be running low on fuel. Off to a big gain in the morning, trying to test $7.00, only to spend the last 3 hours giving it all back and developed a bearish daily reversal off of a new high. Daily reversals are prevalent in gas so would not hang your hat on it but the volume on yesterday’s reversal was nearly 20% higher. As mentioned yesterday, the trade though the week’s end is key for the next couple of week’s price action.

Major Support:$5.27-$5.199, $5.001, $4.40-$4.26, $4.187, $3.972, $3.734, $3.63, $3.584-$3.522
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $6.538, $6.757, $7.346

Big extension yesterday to set a new high, while volume was lighter than Friday (lightest of last week). This may be a market reaching a short term high (for whatever reason) but won’t know until the week is finished from a technical standpoint. There are also very few technical areas at resistance levels as the market blew through them in Feb expiration process.

Major Support:$5.27-$5.199, $5.001, $4.40-$4.26, $4.187, $3.972, $3.734, $3.63, $3.584-$3.522
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $6.538, $6.757, $7.346

Last week continued the strength but started to hit some selling. Go into near term expectations for price in the Weekly section, for today I would expect a slight retracement of the buying back up to Friday’s mid zone around $6.40’s. The market should struggle a little in this top area and correct for a more traditional bull rally. The market has not provided any evidence that there will be a “blow off” type of topping process so expect a more stair step run in the coming weeks.

Major Support:$5.27-$5.199, $5.001, $4.40-$4.26, $4.187, $3.972, $3.734, $3.63, $3.584-$3.522
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $6.366, $6.466-$6.53, $7.346

Spoke of consolidation around the $6.00 area similar to last months behavior around the $5.00 area last month– Well I was wrong as prices exploded on the lightest volume day of the week. That being said, this week’s total volume looks to be the highest in the last month. Higher volume on flat or gaining open interest is supportive to the bullish case. However, this market is starting to reflect an over – cooked bull run in the secondary and primary technical indicators– be very cautious in adding to positions here as prices retreated from testing the early October high. Some folks might advise taking some profits at these highs.

Major Support:$5.27-$5.199, $5.001, $4.40-$4.26, $4.187, $3.972, $3.734, $3.63, $3.584-$3.522
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $6.366, $6.466, $7.346

My apologies for a lack of publications yesterday — brutal stomach ailment. Would of mentioned yesterday, and will again today, that the market is having a hard time with”key” levels ($6.00 this month $5.00 last month) and will correct back to the “key” levels. Last month price retreated 10% before rallying into the close. Does the market trade and close below the key level — no clue. Would expect another consolidation day or two around the $6.00 area as the market interprets the fundamental indicators going forward.

Major Support:$5.27-$5.199, $5.001, $4.40-$4.26, $4.187, $3.972, $3.734, $3.63, $3.584-$3.522
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $6.24-$6.28, $6.366, $6.466

As discussed yesterday, prices spent some yesterday consolidating the gains from recent trade. Longer term technical indicators are not over bought and would still support a test of high end of the range discussed in the Weekly section yesterday. As discussed in the Weekly section, there is likely a brief correction but would not initially expect the retracement to carry far (perhaps $5.25-$5.30). Total volume yesterday was close to the highs from last storage report but lower than last Friday– still support higher prices and continued gains.

Major Support:$5.27-$5.199, $5.001, $4.40-$4.26, $4.187, $3.972, $3.734, $3.63, $3.584-$3.522
Minor Support: $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $5.83, $5.97, $6.24

The expiring April extended its rally to $5.653 last week before fading to expire at $5.336 (similar to expiring March contract which traded to $4.944, the high of its tenure as prompt, before going off the board at $4.568). April settled higher than March for the first time since 2018. May (which closed $.006 discount to April settlement, traded lower on its first day as prompt, then reversed higher. Considered an “outside” day reversal with increasing volume left the new prompt at the highest daily continuation close since November 4th (one exception was the bizarre Feb expiration). The last trading day of March ended with another higher close and the first one above the February high. Calendar month closes above the previous month’s high are usually an indication of continuation of the intermediate term trend (bullish).

Volume and open interest increased along with price for a second week. Average daily volume was an estimated 40,000 contracts higher than last week’s +/- 47,000 increase over the prior week’s. Open interest increased a modest 4,000 contracts last week (from Thursday through Thursday). Volume and open interest moving in the same direction as price is a significant technical positive.