Storage report could not provide needed inertia to challenge either side of the range. Hate to be boring but I am not going to talk about events in gas when they aren’t prevalent. This range type trading may be setting something up for the last part of the month and expiration. Going to be looking at history over the weekend and will publish anything I find on the Weekly section.
Major Support: $3.16-$3.148, $3.136-$3.024, $2.93 Minor Support/Resistance : Major Resistance: $3.32, $3.787-$3.831, $4.063,$4.086, $4.593, $5.333, $5.496
Guess a lot of bears were rooting for the Sea-hawks as prices started with a distinct negative bias last night and were starting to challenge the support zone from the recent range development. This week may be one for extreme patience as the volatility and bias needs to filter out.
Major Support: $3.374, $3.16-$3.148, $3.136-$3.024, $2.93 Minor Support/Resistance : Major Resistance: $3.787-$3.831, $4.063, $4.086, $4.593, $5.333, $5.496
Two weeks ago, after February spiked to the highest settlement value for a monthly contract since September ’22, March began to make up its historically exceptional discount to an expired prompt ($3.732 v $7.460). Well – bid into the weekly close March traded as high as $4.425 late Friday, narrowing the still substantial “expiration” gap by $.436, but the enthusiasm for perennially amply offered March gas was short – lived. When trading resumed March gapped lower. With the most volume ever traded in a day (1,909,214 contracts…the previous record was 1,602,673 traded on 11/14/18 coincident with the Q4 and annual high of 2018) March continued to fall toward a bottom at $3.155 (27.5% below the new prompts close on the last trading day of January).
As March fell, open interest spiked 55,153 contracts (I don’t think that’s a record, but you can see it from there). If open interest increases as price falls it is an article of technical faith that the bulk of the selling was either short hedging of anticipated production or speculative short selling driving the bid lower (if the selling was from liquidation open interest would have fallen). While there was certainly some of both, I am pretty sure the latter was a significant contributing factor…because the following day when March rallied the total fell 54,189 contracts. A whipsaw for the ages for those folks ( illustrative of the dysfunctional state of the current market). Look for additional dysfunction in the coming month.
This is what happens to a market that gets juice up, creates the volatility with short covering then looses all it momentum and plummets back to reality— Boredom sets in — nothing to get nothing to drive — just minor range moves. I think I see my future. One part of my future is there will be no Daily on Friday -enjoy the storage release.
Major Support: $3.374, $3.16-$3.148, $3.136-$3.024, $2.93 Minor Support/Resistance : Major Resistance: $3.787-$3.831, $4.063, $4.086, $4.593, $5.333, $5.496
Mentioned yesterday that a range would start to develop and was confirmed in the trade. Will likely take some sort of fundamental event to bring any volatility back to the gas market.
Major Support: $3.374, $3.16-$3.148, $3.136-$3.024, $2.93 Minor Support/Resistance : Major Resistance: $3.787-$3.831, $4.063,$4.086, $4.593, $5.333, $5.496
Nothing like loosing over a dollar in a day to take a market from being over bought to a more balanced bias. Expectations for trade is to develop the range similar to January and early Feb with the low end of the range developing either side of $3.00 and the high end of the range is likely the highs from last weeks close ($4.20-$4.42). A smaller mid range between $3.00 and $4.00 may hold the market as well.
Major Support: $3.374, $3.16-$3.148, $3.136-$3.024, $2.93 Minor Support/Resistance : Major Resistance: $3.787-$3.831, $4.063, $4.086, $4.593, $5.333, $5.496
February spiked to the highest settlement value for a monthly contract since September ’22 went off the board at $9.353. From the January low ($3.006) February rallied $4.821 to $7.827 in seven trading days before settling at $7.460. February rarely rallies into expiration. The February expiration event most similar in recent history was in late January ’22 when the expiring prompt , which had closed the previous day at $4.233 spiked to $7.346 before settling at $6.265. Expiring February ’26 traded a last day range of $1.927, and a last three day range (from the close on 01/23) of $2.552. March gas is almost always discount to February. Last year the discount was $.365, which was pretty typical of recent years. In ’22 February was $1.982 premium to March at expiration, this year a historically exceptional $3.728.
Six times in the last twenty years March has made up that discount to settle higher than February. It did in ’25 and in ’18 (those are the last two years that March settled premium to Feb, in ‘18 March’s discount was $.464 but did not in ’22.
Spoke last week going into expiration a gap can be a tenuous area for technical considerations — that said, the gap that opened trade last night’s is more indicative of a technical reply to recent activities. From a trade perspective would advise caution letting– the market define its bias consideration.
Major Support: $3.554, $3.374, $3.16-$3.148, $3.136-$3.024, $2.93 Minor Support/Resistance : Major Resistance: $3.787-$3.831, $4.063, $4.086, $4.593, $5.333, $5.496
First day as prompt and a bullish storage release could not provide the inertia to push price up towards the Feb action as prices ended just about where they started. Must be some indecision by the trade as to how active the market will take the price.
Major Support: $3.554, $3.374, $3.16-$3.148, $3.136-$3.024, $2.93 Minor Support/Resistance : Major Resistance: $3.787-$3.831, $4.063, $4.086, $4.593, $5.333, $5.496
Switched over to the March contract as the behavior of the expiring Feb contract is not providing valuable information for analytics. The market will still have to address the $1.00 discount provided to the March contract. What do the forecasts have in store for the market.
Major Support: $3.554, $3.374, $3.16-$3.148, $3.136-$3.024, $2.93 Minor Support/Resistance : Major Resistance: $3.787-$3.831, $4.063, $4.086, $4.593, $5.333, $5.496
