Category: Daily Call

Though collapsing at the end of trade– the expiration was well bid as prices were $1.00 higher than last Friday following three up days and only one declining day (expiration day). July takes over as prompt and history leads to the expiration of some sort or retracement before or just after the Holiday. Some how — I don’t see traders selling into the Holiday weekend, but trade is likely to be light regardless.

Major Support:$7.663, $7.50., $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187
Minor Support: $7.722- $7.69, $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $8.996, $9.60

The trade got they were seeking as prices jumped over $9.00 and got the short covering in the option expiration market. The market could not hold all of those gains during the trade as once the shorts were out — not a lot of buyers remained. Expiration is upon us and who has a clue as to what will happen as fundamentals haven’t changed in 3 weeks and the technical targets just seem to get run over.

Major Support:$7.663, $7.50., $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187
Minor Support: $7.722- $7.69, $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $8.996, $9.60

Per the commentary yesterday — traders tried hard with the classic (now days) early morning rally up to $8.93 only to retrace when the rest of the trade got into the office. Not giving up on the concept that the trade is going to utilize the history of expiration’s to break above the resistance levels just below $9.00.

Major Support:$7.663, $7.50., $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187
Minor Support: $7.722- $7.69, $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $8.996, $9.60

Spoke about the trends in the expiration process in both the Daily and Weekly sections– had no clue that the market would further the trend another month (in the first day)– but it seems like that is the idea. Cannot jump on the July or August contract at these levels currently, though. Not enough volume, the ATR (discussed in the Weekly) is in an historical danger area, and the trade around Memorial Day Holiday, has shown weakness either side of the Holiday, historically. That does not prevent aggressive folk from taking a position during the day only to leave at resistance. That said, the move yesterday does provide the question of whether the trade is setting itself up for a break out above the calendar May high, either during expiration or just after as the July contract is trading at an $.08 premium to June. Should a break above occur– let the short covering occur — don’t chase– wait for the Holiday weakness to provide better opportunities (if it does). If it breaks down chose the level you are comfortable with to initiate length.

Major Support:$7.663, $7.50., $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187
Minor Support: $7.722- $7.69, $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $8.996, $9.60

Was resting during most of the trade day so consider my astonishment when I looked at the screen in the evening when prices are down $.20. Not sure what has changed in the trader’s eyes, but the movements look like they want to test some of the support zones from $7.90-$7.51.

Major Support:$7.50., $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $8.47-$9.60

Under the weather tonight– can’t even stay awake to watch hockey. Nothing to add no real solid support zones until prices decline into the low $7.00’s.

Major Support:, $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $8.47-$9.60

Regardless of lack of interest (volume) prices just grind higher. As mentioned yesterday, the movements are not a general consensus of rising expectations prices this summer, but seem to be rather oriented towards a bias from trading funds seeking an outcome. The suggestion remains keep trades on a daily time frame- not leaving position on over the night.

Major Support:, $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $8.47-$9.60

What a day of trade– prices took the cue from the Sunday Silliness and rocketed prices up to the highs of $8.183 only to find significant selling that took prices back below where they started on Sunday. From there– prices rallied back up above the $8.00 level but on lighter volume. Don’t usually show the 5 minute chart that shows price movement in 5 minuted increment but felt it told the story I wanted to provide today–

On the top of chart is the price and on the bottom is the volume associated with the 5 minute price action. Notice the strong volume in the 8-9 am time frame (CDT) only to collapse on good volume for the rest of the morning. Then on lighter volume prices gradually rallied back up to the close just above $7.95. Why is this important– you need to know that this volatility is being caused by light trade not “general consensus”– that is why the divergences were discussed in the Weekly section. Be very careful buying in or selling early directional movements.

Not sure what fundamental news forced price up to $7.872, but that is what happened last night on the open. Refer to it as light trade silliness with trade trying to force some sort of reaction when the trade is light and easily effected. Was provided some interesting analysis from a good friend that was put in the Weekly section– going to give you a choice of what will be occurring in the near future.

For over a year every prompt contract has weakened around mid life as prompt in its tenure– perhaps that’s what we saw this week. May fell 28.5% from the 05/06 high to the 5/10 low. That was the most since the January contract fell 34% just after December expiration. March fell 22% after the spike into February expiration to the earliest pre – expiration low of the last 14 months (02/11). Expect prompt June to continue the trend of supported prices into expiration. There may be some additional losses prior to the historical monthly prompt trend, expect those to be short lived.