Category: Daily Call

Last week’s reversal off of higher highs is significant for trade this week. Discussed the seasonal trends in the Weekly section for your review, the only issue from last week’s action was the decline in volume in achieving the highs and the declines being met with the highest volume day on Friday in the midst of the declines and weekly close. While the market will still provide rallies (it should set a series of lower highs) prices should meet the rallies with additional selling. Key will be the volume in on days of rising prices vs volume on the days of declines. There are some interesting trends with bear spreads discussed in the Weekly section and keep your eyes on them in the coming weeks.

Major Support: $3.722, $3.58, $3.538-$3.511, $3.385, $3.368-$3.316, $3.198,
Minor Support: $3.87, $3.821, $3.508-$3.485
Major Resistance: $4.054-$4.094, $4.187, $4.238

The expiration of Aug tracked a range either side of $4.00 continuing the trend of being well bid on expiration day. Now we look to at the Sept for leadership which will likely trade toward the lower end of the Aug range should the consolidation (starting earlier this week) continues its trend. While Aug tested the minor support area yesterday at $3.87, September may immediately want to test the same support. Should the bulls spark the Sept contract look for the Aug highs ($4.064) as the initial resistance.

Major Support: $3.722, $3.58, $3.538-$3.511, $3.385, $3.368-$3.316, $3.198,
Minor Support: $3.87, $3.821, $3.508-$3.485
Major Resistance: $4.054-$4.094, $4.187, $4.238

After six days of gains for natural gas, prices went down yesterday, hopefully starting the consolidation period I have been looking for the last ten days. Today is expiration so the focus shifts to the Sept chart below:

Not a significant area of support but the area around $3.87 could be significant short term for the September contract either today or when it takes over as prompt. After the recent strength in the Aug contract and the trend of the last few expiration’s (discussed previously) — what happens today in the expiration is anyone’s guess.

I have no clue what piece of information hit the market at 8 am (EDT) but prices started to garner strength peaking about an hour later at $4.187– sending all the momentum analysis to new levels of strength (though still overbought). Mentioned yesterday, that the recent trend of expiration’s has been strength during the process and this month looks to be continuing that trend.

Major Support: $3.722, $3.58, $3.538-$3.511, $3.385, $3.368-$3.316, $3.198,
Minor Support: $3.821, $3.508-$3.485
Major Resistance: $4.054-$4.094, $4.187, $4.238

Went into some of my reasons to doubt the sincerity of this run at this point in the Weekly section and I advise a brief look. Price may continue there ascent, as perhaps the uptrend will continue and add some more cushion before going off the board. The last four expiration months have. I will be on the sidelines in August and continue the downside trades (discussed last week) into the September contract.

Major Support: $3.722, $3.58, $3.538-$3.511, $3.385, $3.368-$3.316, $3.198,
Minor Support: $3.821, $3.508-$3.485
Major Resistance: $4.054-$4.094

Well- prices finally got what they seemed to be thinking and that was trading above the $4.00 point. Now what? The market is over-bought in the extreme zone on both the daily and weekly chart; the market seems to be chasing 3 standard deviations above the 20 week SMA– let alone well above 2 standard deviations; and volume is stagnate. I will not be buying into this leg of the run– as stated numerous times in the last week– it needs to chill. Starting to look at some puts as it continues to get bullish blind.

Major Support: $3.722, $3.58, $3.538-$3.511, $3.385, $3.368-$3.316, $3.198, $3.129
Minor Support: $3.821, $3.508-$3.485
Major Resistance: $4.054-$4.094

Prices certainly gave the effort to hit $4.00, but once again, prices melted away toward the end of the day. You all know that I would like to see a retracement before prices can gain the momentum to break above that key level. This may extend lower as prices are declining late at night.

Major Support: $3.722, $3.58, $3.538-$3.511, $3.385, $3.368-$3.316, $3.198, $3.129
Minor Support: $3.821, $3.508-$3.485
Major Resistance: $3.87-$3.905, $3.955, $4.054-$4.094

Not sure yet — but his is starting to take on the characteristic “blow off top”. Why do I mention — the market continues to run at 2 standard deviations above the 20 week SMA– the market continues to trade above the extreme zone on the Weekly RSI. That said, as I mentioned the other day, the Daily RSI still has not entered the extreme over bought but is starting to tickle it. Folks just keep buying it (for what ever reason) which leads me to start questioning the type of rally this is. Volume remains neutral and open interest does not seem to be waning. It seems that the target of $4.00 is a desire for a few– I still expect a retracement to assist in forming a base for the annual Q4 run. If it is a blow-off set stops tight otherwise join me in waiting for a retracement to reset length.

Major Support: $3.722, $3.58, $3.538-$3.511, $3.385, $3.368-$3.316, $3.198, $3.129
Minor Support: $3.821, $3.508-$3.485
Major Resistance: $3.87-$3.905, $3.955, $4.054-$4.094

On a day where the energy sector was taken to the shed — Natural gas started with gains an kept them through the day— regardless of the dollar. It is starting to seem like some investors are wanting to see the response over $3.80 similar to the trade over $3.40 a few weeks ago. My comments are the same now as then when you are near the top of a range you sell for profits and if shorting outright– keep stops tight.

Major Support: $3.58, $3.538-$3.511, $3.385, $3.368-$3.316, $3.198, $3.129
Minor Support:$3.508-$3.485
Major Resistance: $3.722, $3.769, $3.811-$3.821, $3.87, $4.66

Very rarely when I take a week off — does the market trade an inside week (within the previous week’s high and low)– usually it blows up or out and I am left to explain what happened. Natural gas trade in a tight range (almost as boring as the fishing) only accomplishing further consolidation for the next move (be it up or down). Go into some of the thoughts of up or down in the Weekly area — for there is ample reasons for both directions. Prices are still in the extreme over bought area on the Weekly RSI but not on the Daily RSI so the consolidation comment is warranted. Price are headed into a seasonal weak period of the year (late July into the Labor Day weekend) so that should put some pressure on the market. The bulls can hang there bias on the market continuing to trade higher and open interest gaining (see Weekly), but volume is starting to weigh on movements. Still consider a brief pullback in order, but natural gas is in a longer term bullish trend (as discussed here since last fall).

Major Support: $3.58, $3.538-$3.511, $3.385, $3.368-$3.316, $3.198, $3.129
Minor Support:$3508-$3.485
Major Resistance: $3.722, $3.769, $3.811-$3.821, $3.87, $4.66