Category: Daily Call

Mentioned in a previous blog that if price action does not take advantage of the previous decline– it was go to miss a great opportunity. The same can be said for the current declines. Technical indicators are confirming the market is “consolidating” or range trading for the last couple of weeks with open interest gaining last week with volume declining from last week and lower day to day as compared to last week. The momentum indicators are calm — confirming the consolidation.

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 have to get used to the volatility now in the market — for the last couple of years ten to fifteen cent moves were a big thing — now we trade in a world of twenty and thirty cent moves. Reminds me of the days 5 to 20 years ago when volatility was every day (so it seems in my memory). I digress- but prices did challenge the $5.17 area and went on up to the next mini range before giving it all up towards the end of the trade day. Now What? You guessed it — more volatility and range trading like through the end of Dec contract. Remember the history of the last few months trading on strength during expiration. Too early to tell for Dec but the schedule is rather bizarre next week with the Holiday.

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

Bouncing off of support lows from last summer, prices moved upward in an orderly way. Just as I expected the market to test the lows — I expect the run to move prices back up to $5.175 and test some of the areas of resistance. Time and weather forecasts will identify how far the rally runs. From a trade perspective, I don’t follow the fundamental data points, I will be trading based upon the range and the mini-ranges that develop.

Major Support: $4.88-$4.825, $4.728-$4.70, $4.61, $4.537,$4.375,
Minor Support: $4.66
Major Resistance:$5.028, $5.076, $5.148-$5.175, $5.339-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493

After prices broke down through support zones (some commonly followed) on Wednesday, they rallied back above $5.00 on Thursday only to run into additional selling. The technical break down last week can not be under stated– the only positive technical aspect to trade is the market has not closed below the key support area defined back to the fall (discussed at length in the Weekly section). If prices do not challenge those lows — they will miss a wonderful opportunity to do so. Until that happens the lows should be supportive and the low end of the trading range.

Major Support: $4.88-$4.825, $4.61, $4.537,$4.375, $4.211, $4.156, $3.92
Minor Support: $4.728-$4.70, $4.66
Major Resistance:$5.028, $5.148-$5.166, $5.379-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493

Many of you bears out there will claim that there was a break to a lower low (thereby reversing the recent bull trend) but prices did not close below that level to confirm a break down. Though the push below, the previous low, was impressive, currently it accomplished nothing more that expanding the trade range. I will be gone today so there will not be a Daily on Friday– my only comment is to work the range with tight stops — but the trend of the last couple of months is still in tack but has suffered some technical damage.

Major Support: $4.88-$4.825, $4.61, $4.537,$4.375, $4.211, $4.156, $3.92
Minor Support: $4.728-$4.70, $4.66
Major Resistance:$5.028, $5.148-$5.166, $5.379-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493

A serious technical breakdown takes prices down — trying to break the trend of the last months, prices broke through the 50 day SMA, commonly followed, and accelerated toward the key area at $4.825 only to fail. The area around the 50 day is not as significant (some traders use these areas as trend) but the key to the recent run lays with the higher low after the higher high last month and in early in Oct. A break and settle below that area may have serious impacts on the run since late August.

Major Support: $4.88-$4.825, $4.61, $4.537,$4.375, $4.211, $4.156, $3.92
Minor Support: $4.728-$4.70, $4.66
Major Resistance:$5.028, $5.148-$5.166, $5.379-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493

Have nothing new to add to this range bound market. Perhaps we will tread water for a while until some fundamental data points either in the U.S. or Europe to spur action. The technical element only confirms the continued consolidation of prices.

Price action continued in the recent month testing the commonly traded Moving Averages as well as adding to the support between +/- $5.15 and $5.20, the trend line rising from the September and October lows of December gas ($5.165 during the past week, $5.213 for the coming week). Following the successful test of the trend line and moving average support prompt December rallied to trade as high as $5.876 before fading to end the week almost exactly mid-way between the week’s low and high ($5.516 v $5.4955).

The wide weekly ranges that have resulted in higher lows and lower highs and the series of relatively “tight” weekly closes are consistent with the construction of a technical pennant which can construed as part of a continuation pattern– unless/until prompt gas trades through and closes below the last significant higher low. This week for the first time in nine weeks total open interest ,which had declined from 1,468,636 in mid – September to 1,267,227 this past Tuesday, increased. Declining volume and open interest is consistent with a period of price consolidation. Increases in both will be indicative of impending resolution of the consolidation. That will be the key to the upcoming resolution of the month long consolidation.

Nothing should surprise me in trading Natural Gas after 30 years but some things occur that leave me scratching my head (it is bald now). Prices run up $.14 after the outcry close on Friday and I assume it to be related to some forecast change. Then prices open Sunday night and give it all up– what gives with that. The range trade continues and should be profitable outside of a breakdown mentioned in the Weekly section.

Yesterday, gave us some volatility calmness compared to recent days. No directional bias was established on the storage release. Continue to work the ranges of the last month and this will likely be the trade until the winter in the U.S. and Europe becomes better defined.

Major Support: $5.275, $5.17, $4.88-$4.825, $4.61, $4.537,$4.375, $4.211, $4.156, $3.92
Minor Support: $4.728-$4.70, $4.66
Major Resistance:$5.64, $5.964, $5.996,$6.177, $6.24-$6.493