Daily Call

The close below $2.00 opened up the possibility for prices to capitulate and they have last night dropping to $1.83. Would expect prices to stay above that area during trade today but the key question (with the expansion of the Managed Money short trade) are there enough additional shorts to significantly add to and extreme existing position. You will see on the charts above the Bollinger study has prices beyond 2 standard deviations and the RSI study is in extreme over sold territory. Can’t say prices won’t extend further, but there is likely a brief reckoning coming.

Finally, a daily close below the $2.10 zone which should set up a test of the August lows of $2.029. Perhaps the market will get forecasts to propel the market to test those lows. If a change occurs, the market falls back into the range.

Prices tested the support around $2.10 again and found buying— even with the warming changes to the forecasts. The is no technical momentum to the trade currently, support holds – resistance holds. Nothing is oversold, sold additional momentum may occur— but if the fundamental forecast don’t facilitate additional declines — where is going to come from.

Not much has changed as the market softened slightly yesterday but still sits near the high end of the range. I know it is boring but something will break eventually. Until then — play the range.

It seems I am not the only one looking at the trade from a skeptical perspective. We get a bearish storage report and prices rise — oh ok. Then further strength going into the weekend— ok. If markets don’t go down when they get bearish news — then something is amiss. The market has tried several times to get down to the Aug lows a t $2.029 only to find support. Speculative shorts continue to add to positions (according to the CFTC) but are they running out of trade ammo? I am not convinced that this market is going to break below those August lows until the winter is over. Until then — play the range.

Yesterday may be a tell tale as price could not extend downward extensions on a bearish release(when price don’t go down on bearish news they are headed up). Perhaps a base is coming but playing the range, daily, has worked out ok. Would be careful here shorting the market at resistance now.

Perhaps the sellers are waiting for yet another bearish release — but that should of been baked into prices already. I am still puzzled at the lack of extension to the declines as the price action seems to be lacking momentum and more consolidation for the next move. Up or down the market is consolidating recent declines and waiting on further information. Its boring, but continue to play the range in the prompt.

What was support a couple of weeks ago now seems to be providing resistance. It almost looks like the market is forming a base from which to rally. Perhaps this week’s storage release will provide better insight as it will be bearish again. I am getting some interest that with all the bearish data hitting the market additional pressure to prices is not occurring. I stated yesterday that the techs suggest a test of August lows should be expected but am not seeing confirmation with the trade. Play the range still but keep an eye on the potential for divergences developing in the price action.

I am confused with the price action yesterday— from everything I heard from you fundamental folks on weather, the next two weeks are bearish. Granted, prices did not rocket up, but the support given causes me concern. Techs say that we should retest the Aug lows at $2.029, but price actions seems to lead to exhaustion of sellers. This could be a delicate moment for the market. Play the range.

Not a bunch of support areas left for the declines until we get to the August lows of $2.029. Not sure it will get there directly but the test would be significant and may take some time (attempts). The short interest is looking for the break and potential break down to $1.90. We shall see.