Category: Daily Call

A very telling day of trade as the report came out and prices immediately declined, followed by additional declines that took prices down to $6.53 only to find some buyers. Those buyers took prices back to where they were when the report was released. From there prices consolidated on a daily basis. What made it interesting was the rapid declines and momentum were abated by the support and buying– is the market defining a different perspective from the recent sell any rally to a more supportive structure–perhaps. Stick with the defined range.

Major Support: $6.02, $5.623, $5.59-5.572, $5.06
Minor Support: $5.548, $5.40-$5.45
Major Resistance: $6.34-$6.43, $6.587, $6.638

Price action continued to strengthen yesterday going into the upcoming storage report. Some of the data behind the release is of interest to this non fundamental trader. While reviewing the last few reports and the data behind the storage injection — I found it odd that the LNG receipts was above last year’s and only 1.5 Bcf/day behind the highs from earlier this year (before the fire). For loosing 2 Bcf/day due to the fire — it seems only a portion is missing from demand picture.— Not sure what that is all about but it may have impact on inventories this October.

Major Support: $6.02, $5.623, $5.59-5.572, $5.06
Minor Support: $5.548, $5.40-$5.45
Major Resistance: $6.34-$6.43, $6.587, $6.638

Discussed in the Daily last week that the speculative short interest (still over 22% of open interest -per the report dated last week) had become problematic and could be the source for some of the buying that occurred last week. With sellers sufficient to drive price lower earlier in the week, then surged higher. It is clear that the lack of total open interest will create volatile movements. While that rally is likely just an oversold reaction, both the daily RSI and the Bollinger study extreme zones, the high volume (on a relative basis) violation of the declining trend line suggests (at the least) a near – term low. More important is that prompt gas undercut the June low and round low on sellers while the 40 – week SMA has now been successfully tested twice.

That said, the gas market traded a rare “outside” month during calendar June (the last one of those was during September ’20) which inflicted a lot of technical issues to the charts. Time will be required to repair the issues and there are a lot of trapped late coming bulls between +/- $5.50 and $9.50. Many of them will be elated to exit those positions anywhere near breakeven. Expect rallies to find some sellers at the beginning of this potential rebound.

Early trade shows a stronger opening for price on Monday– we shall see. Technical input continues to have the short term market over sold but the action on Friday severely reduced the extreme levels. Think some of the selling on Friday was bulls being excited about being able to get out of losses at a significantly higher prices than earlier last week.

Major Support: $5.623, $5.59-5.572, $5.06
Minor Support: $5.548, $5.40-$5.45
Major Resistance: $6.34-$6.43, $6.587, $6.638

Been warning about the potential of a rally like yesterday for a few days and the storage report provided the fuse for ignition. Look at the CFTC report action of the Managed Money Short position as they gained over the last few weeks.

It is not surprising that while total open interest has been declining, the speculative shorts have now established at over 22% (last report June 28) of the total open interest. Where do prices go from here– unknown– but the rally is unlikely to end immediately and may start to define the high side of an upcoming summer range.

Prices spent another day in a rather quiet day range– almost like the consolidation pattern discussed here several times. May be setting up for a run or developing the potential for additional declines. Likely, the set up is for the upcoming storage report (utilizing that for the volume for the directional push). Runs will find sellers at or around $6.00 while declines will need to break below and close below $5.40-$5.35.

Major Support: $5.623, $5.59-5.572, $5.06
Minor Support: $5.548, $5.40-$5.45
Major Resistance:$6.021, $6.34-$6.43, $6.587, $6.638

Seems the market wants to digest it positioning here as it heads into a light holiday trade weekend. One of the lightest volume days of late. My positioning has not changed will be buying any dips in winter contracts, trying to offset the volatility that may occur in the prompt month. Want to wish you all a great Independence Day celebration as I will not be posting a Daily tomorrow.

Major Support: $6.245, $6.02
Minor Support: $6.19-$6.175
Major Resistance:$6.684, $7.005, $7.66, $7.725, $7.816, $7.955

Not sure how to qualify that expiration– prices declined during the beginning of the process– only to find strength the last two days — was the expiration well bid — I would suggest that 10% gains off of the lows signifies a well bid situation for the 16th consecutive month but the strength only took prices back to where they started– so you can’t call it a rally into expiration. Perhaps I will refer to it as a 15+ month trend. What is left for the August contract to take over as prompt and with the recent rebound, perhaps a slight extension of the recent gains. One element is a given — open interest continues to decline (expiration partially responsible) so the potential for volatility is great.

Major Support: $6.245, $6.02
Minor Support: $6.19-$6.175
Major Resistance:$6.684, $7.005, $7.66, $7.725, $7.816, $7.955