Category: Daily Call

In reference to the Daily yesterday the price movement looks more like the action from March rather than April. Would not be looking to pound from a short side and as the market remains with a bullish bias currently. If you want to be short — look down to $6.66 (April low on Continuous chart) — if you want to be long look to yesterday’s high as an initial target for gains.

Major Support:, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187, $3.972, $3.734
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $7.346 , $7.427, $7.536

Yes, I realize it is May but wanted to show the choices that the market has for near term direction. When the April contract took over in March as prompt there was some early softness into a brief rally only to have prices correct back and in the middle of the month retest and consolidate as the low end of the range (short term). Calendar April (with May as prompt) had no such silliness and just took off to higher ground setting a series of higher weekly highs until prices got so over bought, that the $1.40 correction was imminent. What does June do– if it replays last month’s action — rest assure that the $8.00 area is in focus. Should the trade copy March — a retest of the mid-$6.50 area may be coming.

Major Support:, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187, $3.972, $3.734
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $7.346 , $7.427, $7.536

What do we say — never bet against a solid trend and the rally into expiration is now rocking along. Have no clue to the range today but I did see that the June contract closed some of the differential while prompt chased over $7.00. Not sure what that is about as the differential to July ended back over $.20.

Major Support:, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187, $3.972, $3.734
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $7.346 , $7.427, $7.536

Mentioned in the web site that the market would have to decide between the weakness from last week’s action or the historical trend of rallying into expiration during the period. Yesterday gave a good early indication of the intentions for expiration. My interests are more focused on the summer contracts (I use July) and they currently are running with the May contract (either side of $.20 differential since the second week in April). It will be interesting to observe the June and July contracts during the May expiration and the initial phase of the June as prompt.

Major Support:, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187, $3.972, $3.734
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $7.346 , $7.427, $7.536

Prices opened with a large gap in the daily charts on Sunday — only to spend the next four hours closing the gap. There is a struggle this week between the historical trend of expiration’s being well bid versus the momentum from last week’s reversal (see Weekly section). This will provide some insight as to June’s tenure for the near term but the longer term bias has not changed as the market remains a bullish bias.

Major Support:, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187, $3.972, $3.734
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $7.346 , $7.427, $7.536

Discussed yesterday about the potential for consolidation and we got a taste of it when the storage report came out and prices fell to just above $6.70 only to spend the remainder of the day working back higher. We are reaching the May expiration and while last month showed significant gains from the 24th until the 28th (falling at the end), the trend continues to show well-bid expiration’s. Would expect that trend to continue until it doesn’t. The action from yesterday confirms my belief that the market is still well supported even with the $1.00+ decline from earlier highs.

Major Support:$6.538, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187, $3.972, $3.734, $3.63
Minor Support: $6.757, $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $7.346 , $7.427, $7.536

The initial phase of re-entry from the blast off (blow off) top started yesterday — but be cautious. The movement down below $7.00 was informative but not the end-all. The bulls may want to try consolidation for movements, but not sure if that starts until prices test the $6.50 area. Yesterday’s low went just down to the lows from Thursday (before the Holiday shortened weekend) only to find support (shocking). Still recommend patience here.

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 else can be said after the update in Weekly and Daily yesterday and watch prices up another $.60 yesterday morning– extending the existing over bought conditions. So much fun — but the issues will be coming later when the floor falls out from underneath the buying. Continue to be very careful as the correction will be swift and likely violent. Look for previous Resistance to provide minimal support.

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

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.