Daily Call

Strong Run Into Storage

Daily Continuous

Prices rallied on the expectation of a substantial with drawl from storage last week. Some analysts are stating that the report will likely take inventories from a surplus to a deficit against the 5 year average. Perhaps folks bought into the report — now the question will be is there further buying to be had after the release. The range has not change for the Feb contract.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.39-$3.31, $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.829, $3.92, $4.00, $4.201, $4.378-$4.394, $4.461, $4.75

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Steady Declines

Daily Continuous

The declines continued but never really challenged the low end of support. If a buyer– wait for tests of support. The declines in prompt were significant compared to the outer months so you will need to set up range areas for the differed contracts per your risk range. The prompt will fall faster than differed like yesterday — so establish the support area you are comfortable with. Bears have to wait to a rally to establish positions.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.39-$3.31, $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.829, $3.92, $4.00, $4.201, $4.378-$4.394, $4.461, $4.75

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Holiday Quiet Trade

Daily Continuous

Just want to reiterate the comments from yesterday and price action had no change to the comments from yesterday’s comments.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.39-$3.31, $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.829, $3.92, $4.00, $4.201, $4.378-$4.394, $4.461, $4.75

Friday’s Weakness Likely to Spill Over

Daily Continuous

The $.40 collapse in prices on Friday indicates that the run up ran out of steam as prices attacked the $4.30 (and above) area was not surprising as technical indicators confirmed the lack of long term support for higher prices. Today is a light trading day with the Holiday — which presents itself as a potential opportunity to indicate near term bias.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.39-$3.31, $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.829, $3.92, $4.00, $4.201, $4.378-$4.394, $4.461, $4.75

Another Failure at Resistance With Divergences

Weekly Continuous

Prompt with a gap and strength but did not remain above the December high for very long and ended the week at $3.916 with trading volume substantially less than on 12/30 (685,311 v 998,839), which creates another volume divergence. Not give up it performed another try on Thursday, leaving the prompt at the highest close ($4.258) since the last trading day of 2022 but again volume significantly lagged that traded at the December high and February fell to finish the week lower without testing Monday’s gap higher. While prompt gas continues to work higher the lower weekly close was the third in the last four weeks.

Prompt February was the only monthly contract to finish the week with a loss. Prompt in waiting March gained $.081, reducing February’s premium to $.469 from last week’s peak of $.591. A year ago when February went off the board at $2.490 March ’24 was $2.054 and was never able to make up much of that discount. Trading the high of its tenure on 02/01 at $2.168 before falling to $1.502. Will see if history is going to rhyme.

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Another Close Over $4.00

Daily Continuous

Prices close over the key area of $4 again and is starting look like its comfortable at those levels.Perhaps some of the strength is tied to the price of crude or the idea that the storage release should be a fairly strong number (perhaps eliminating a large chunk of the surplus over the 5 year average). Regardless, of where the strength is sourced — it should be respected and traded.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.39-$3.31, $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.829, $3.92, $4.00, $4.201, $4.378-$4.394, $4.461, $4.75

Rally Short Lived

Daily Continuous

The Sunday rally was short lived (less that an hour in the open trade), with prices coming back to the high close last week. That is a daily reversal and now lets watch to see if it becomes a weekly reversal. Gather the forecasts changed which abandoned the bulls from Sunday– such is life when you are playing weather forecasts.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.39-$3.31, $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.829, $3.92, $4.00, $4.20

Higher Weekly Close

Weekly Continuous

A significant technical factor was Friday’s higher daily close, which leaves the daily closing trend intact. The trend of a series of higher lows…and now a higher high since prompt November closed at $2.258 on October 17th. This week’s close at $3.989 validates last week’s higher low at $3.354 and suggests trend continuation. The higher weekly close (see Chart above)…the highest since the beginning of 2023 (and above the 2016 weekly closing high) tends to confirm the breakout from a lengthy flat base. There is little definable weekly closing resistance other than a low close in February ’22.

At the low daily close in October the daily ATR (a measure of volatility that is essentially the average range of the last fifteen days), was $.119 and has more than tripled since then to $.359. Comparatively, during the rally from the April low to the June Q2 high the daily ATR increased from $.091 to $.205. Following the January ’24 high the peak was $.312 (the peak of the ATR usually lags the price high). The highest calculation of the last several years was $.769 in June ’22.

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Daily Close At the Highs

Daily Continuous

Go into the impact of the close last Friday and Daily impacts in the Weekly section but the open on Sunday night challenge some of the thoughts. One thought remains from the price action is the rally on Sunday night will likely run into serious selling at some point, from my perspective trading this rally will require tight stops and remember that the market is over- bought and keep you eyes on Bollinger Band study which has the price action well over the two standard deviation band (Upper band is at $4.10 currently).

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.39-$3.31, $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.829, $3.92, $4.00, $4.20, $4.378

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Solid Gains on Bearish Release

Daily Continuous

Trade started strong and what I thought was bearish storage release, prices stayed supported. That may be a clue in itself for the near term.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.39-$3.31, $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.631-$3.681, $3.829, $3.92, $4.00, $4.20