Category: Daily Call

While prices rallied during Friday the selling at the end of the day suggests that prices will open lower which they did in a big way on Sunday night. Opening a gap through the major support zone that prompted the rally last spring. Now we need to see the response to the gap opening and how low prices are tempted to go. Needless to say, the market is becoming over sold and folks seem real comfortable with the “winter is over” concept — seen this before take a look at Dec ’15.

Major Support: $3.944, $3.91, $3.87, $3.734
Minor Support:
Major Resistance: $4.02, $4.127, $4.25 $4.61, $4.67, $4.735, $4.825, $5.109-$5.175, $5.339-$5.40, $5.64

Decided to add the Weekly continuation (below) chart to give an idea of what the declines are looking for. I would expect that a continuation of weakness below $4.00 will find some liquidation covering (stops) that send prices down an additional $.03-$.05– but the real target is likely the 40 week SMA (close to the 200 day SMA) at $3.90 which has held the market since Sept ’20. A break below that will have serious technical implications. In the near term the market is now starting to approach the extreme zones on the momentum indicators (Daily RSI) but could test the $4.00 before entering the extreme zone. The market seems to be looking for the low end of the new range and perhaps today will give us a better indication.

Looking at the Chart above you will notice that all of the run since the first week in August has now been eliminated — that does not mean that any potential rally can’t happen– but yesterday’s follow through, likely means that rallies will provide good places to sell to traders. Yesterday, mentioned that the bias had been modified to neutral and with the extension below additional support zones, the trade bias is now distinctly bearish.

Major Support: $4.561, $4.375, $4.276, $3.944
Minor Support:
Major Resistance: $4.61, $4.67, $4.735, $4.825, $5.109-$5.175, $5.339-$5.40, $5.64, $5.964, $5.996

The extension breaking below the support levels that had held the market during the fall ($4.70) broke down yesterday and as expected, the extension has modified the bias to neutral from the previous bullish standing. The long term bullish trend remains but the current trade should be considered neutral to slightly bearish bias currently. Fundamental traders have to be scratching their heads as all during the run in the fall the trade constantly utilized the bullish Dutch and Britain gas contracts as support for the run in Nymex. Small problem with that logic as both those contracts have remained firm while the Nymex has dropped nearly a dollar. Guess this is another reason why I rely on technical data points and not the games (or narratives) that press and pundits play. Take a breather and let the market settle for a day or two.

Major Support: $4.67, $4.61, $4.561, $4.537,$4.458,$4.375, $3.944
Minor Support:
Major Resistance: $4.735, $4.825, $5.109-$5.175, $5.339-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24

Prices extended down another $.25 from the Sunday night initial movement and looked like they were poised to test the major intermediate support around $4.70 before some folks brought some buying back to the market. I said last month (couple of times) that if prices don’t break below the intermediate support levels — then they were gonna miss a great opportunity. Same thoughts are now and it will be interesting to watch. All the fundamental folks say winter in December is over so if support holds — then the market is saying something. Should it break- then the bullish bias for three months is brought into doubt.

Major Support: $4.825, $4.728-$4.70, $4.61, $4.537,$4.375,
Minor Support: $4.66
Major Resistance: $5.109-$5.175, $5.339-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493

Expanded on the expiration in the Weekly section and expectations for the coming period, many of which are becoming accurate in the early trade on Sunday night. Similar to the major declines last month– the move should test the low end of the range (established and confirmed last month) around the $4.70 area. This is the key area discussed a couple of weeks ago highlighting the trend of higher highs and higher lows since fall ’20 that has helped define the recent bullish bias to trend.

Major Support: $4.825, $4.728-$4.70, $4.61, $4.537,$4.375,
Minor Support: $4.66
Major Resistance: $5.148-$5.175, $5.339-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493

Let me take this opportunity to wish all a Happy Thanksgiving Holiday as prices continue to maintain the range with some slight extension early in the day or after hours with Globex platform. Would expect this range action to continue during the expiration but volatility may be exaggerated with light trade over the next couple of days.

Major Support: $4.825, $4.728-$4.70, $4.61, $4.537,$4.375,
Minor Support: $4.66
Major Resistance: $5.148-$5.175, $5.339-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493

When the market opened on Sunday night there was a “mild” correction downward — but when the market opened in the morning, prices just collapsed and went below the previous low from late September. From there, prices rebounded and closed the day back within the recent range. The bias that I have been commenting on since fall ’20 does not die with a break below the $4.70 area but the trend may get adjusted with a daily close below that area. The current trade has a slight positive bias, but since the break below $5.20 the trade is neutral until further definition. This week remains with potential volatility significant– there are two counter forces –weather forecasts vs trends of the last eight months showing strength on expiration.

Major Support: $4.825, $4.728-$4.70, $4.61, $4.537,$4.375,
Minor Support: $4.66
Major Resistance: $5.148-$5.175, $5.339-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493

Prices tested major support last week and failed to break below, which will bring an interesting flavor to trade this week. On Friday, there was price strength at the close of Globex trade, and early trade on Sunday has eliminated those gains. Where does it go from here … would expect declines today (obviously) but not sure the recent trend of the last eight months will be broken (discussed further on the Weekly section). There are some potential issues this week with trading times and the days so tread carefully during the week.

Major Support: $4.88-$4.825, $4.728-$4.70, $4.61, $4.537,$4.375,
Minor Support: $4.66
Major Resistance: $5.148-$5.175, $5.339-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493

I guess the area between $4.80-$4.70 is going to be tough to break, so far. Yesterday or today may be the best opportunities for a break to happen. The market has shown the propensity to rally into expiration, be aware that November was the eighth straight contract month to rally into expiration…and that the last five of those have traded their pre – expiration lows between the 16th and 21st before a significant gain. Next week’s expiration will be interesting as the Holiday provides some odd situations as the market will expire on next Friday in a shortened trade day.

Major Support: $4.88-$4.825, $4.728-$4.70, $4.61, $4.537,$4.375,
Minor Support: $4.66
Major Resistance: $5.148-$5.175, $5.339-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493