Daily Call

Consolidation Period

Daily Continuation

Prices seem to be consolidating around last month’s lows — but the question is– does the consolidation reflect a base for another rally or another leg down. The market will determine but I will be looking at history and see if there is any reference to historical tendencies after an early December high.

Major Support: $4.219-$4.139,$4.083,$4.055,
Minor Support : $4.46-$4.42, $3.75,$3.65
Major Resistance: $4.901, $5.01, $5.325, $5.37

Trading Range Expands to the Downside

Daily Continuous

Two days and a dollar later, the declines are setting up for the low side of the range to be established. Mentioned yesterday — not sure how low the range will expand to– but prices have now declined to the high side of the range that was established in Nov trade.

Major Support: $4.219-$4.139,$4.083,$4.055,
Minor Support : $4.46-$4.42, $3.75,$3.65
Major Resistance: $4.901, $5.01, $5.325, $5.37

To read The Daily Call you must be a subscriber (Current members sign in here. ) Start your subscription today.

Expected Price Retrace Occurs

Daily Continuous

Yesterday’s reaction to Friday’s action was predictable (per the Weekly comments) as the over bought market needed to correct and retrace some of the Friday gains. Had a solid (and profitable) decline in prices and not sure the declines are over as the retracement might continue for a few days (range modifications need to be established).

Major Support: $4.219-$4.139,$4.083,$4.055,
Minor Support : $4.46-$4.42, $3.75,$3.65
Major Resistance: $4.901, $5.01, $5.325, $5.37, $5.49

Bullish Bias Close But…

Daily Continuous

I discuss many of the events that occurred last week in the Weekly section so I will not repeat here. Last week was instrumental in defining an expanding range and a bias change to the near term market. But it also revealed some issues going forward that I urge you to read. For now, on Sunday night, the market seems to be bringing some “reality” back to the trade. Let this correction play out as it may reflect another range change.

Major Support: $4.219-$4.139,$4.083,$4.055,
Minor Support : $4.46-$4.42, $3.75,$3.65
Major Resistance: $4.901, $5.01, $5.325, $5.37, $5.49

Bias Change For Now

Weekly Continuous

In the previous Weekly and Daily writings, the handwriting on the wall that prompt gas would trade a higher high, it was suggested that January’s previous highs +/-$4.95 – $5.05 were likely to present formidable resistance. The zone of resistance did limit January’s advance (for a a few days) but did so with increasing volume and open interest. Price, volume and open interest increasing in tandem indicated that the market was getting a running start at higher highs.

Once January broke through the resistance zone, volatility and the range traded expanded. On Friday the low was $5.027 the high $5.496 (creating the range of $.469). You have to go back a way to find the last time a prompt contract traded a wider range. On March 4th prompt April traded $.495 with 1,094,416 contracts changing hands. That March high that established a higher high with less volume. They may still be counting but Friday’s volume looks to be around 1,107,300

To read The Daily Call you must be a subscriber (Current members sign in here. ) Start your subscription today.

Big Day For Bulls

Daily Continuous

It is not often that you see prices decline into a storage release and then when the release announces a more bearish withdrawal than expected, prices rally to set new highs. My guess is that the sellers are on their heals. The weekly charts show a market over-bought (RSI at 86+) and the market is currently well above the 2 standard deviations beyond the 20 week SMA. Bulls should be cautious at these levels of technical extremes. Not saying the run is over- but caution is advised.

Major Support: $4.219-$4.139,$4.083,$4.055,
Minor Support : $4.46-$4.42, $3.75,$3.65
Major Resistance: $4.901, $5.01, $5.325, $5.37

To read The Daily Call you must be a subscriber (Current members sign in here. ) Start your subscription today.

A Close Right On the Resistance

Daily Continuation

Prices decided to close the day on top of the resistance level at $5.01. Now there is a significant area for prices to run into issues between $5.01 and the July ’22 low of $5.325. I am expecting some small retracement back under $5.00 before the next move up should prices want to continue the run

Major Support: $4.219-$4.139,$4.083,$4.055,
Minor Support : $4.46-$4.42, $3.75,$3.65
Major Resistance: $4.901, $5.01, $5.325, $5.37

To read The Daily Call you must be a subscriber (Current members sign in here. ) Start your subscription today.

Slowly Moving Ahead

Daily Continuous

The move yesterday was a slow continuous gain in prices — it is becoming more evident that the mentioned test of $5.00 and prices will likely require additional weather forecasts bring comfort to the bull’s position.

Major Support: $4.219-$4.139,$4.083,$4.055,
Minor Support : $4.46-$4.42, $3.75,$3.65
Major Resistance: $4.73-$4.75. $4.901, $5.01

Dec High Yet to Come

Daily Continuation

Suggested yesterday that the test and close of last week signaled the potential for prices to test the high from July at $5.01, depending on the response to last week’s close. The trade yesterday, confirmed that the gains will likely test that zone as prices retreated in the early trade only to find the footing and buyers necessary to settle higher than Friday’s close.

Major Support: $4.219-$4.139,$4.083,$4.055,
Minor Support : $4.46-$4.42, $3.75,$3.65
Major Resistance: $4.73-$4.75. $4.901, $5.01

To read The Daily Call you must be a subscriber (Current members sign in here. ) Start your subscription today.

Expiration Weakness Forms a Bounce

Weekly Continuous

New prompt January, the premium for which had diminished to $.061 (versus $.163 a week ago) reversed higher from a December expiration day low of $4.390 to trade the high for calendar November on the last trading day of the month. This was the second straight calendar month to do so. This week’s close was the highest continuation close since the Friday before Christmas in 2022 and the highest close for prompt January since mid – July (07/18, $4.850 v $4.870, the continuation close that day was $3.565, a timely illustration of how deferred month premium dissipates). 2,013,263 contracts traded that week in July, an estimated 2,218,448 during the past holiday shortened week, which suggests that the high traded during week ending 07/18 ($5.018) is likely to severely tested.

The consensus of technical indicators remains neutral but with an improving price positive bias. The improvement in the “bias” was attributable to an increase, in open interest, the first week over week increase since week ending 10/17 . The primary reason that the consensus steadfastly refuses to reach positive agreement is the severely overbought condition. The weekly RSI has remained well into its historical extreme zone for four weeks. That historically dependable mathematical extreme combined with prompt gas ending five straight weeks more than two standard deviations above the 20 – weeks SMA and is now 37% above the 40 – weeks SMA is not, adding significantly to length. Without a substantial retracement of gains from the October low be patient and seek a correction to add to positions.

To read The Daily Call you must be a subscriber (Current members sign in here. ) Start your subscription today.