Daily Call

Gap Starts Trade Week

Daily Continuous

A distinctly negative bias at the end of last week, reversed quickly yesterday based on a significant modification to weather forecasts creating a technical reversal higher. Discuss some of the ramifications in the Weekly section, but the market has now extended the action I expected this week. Still a negative bias but the market will have to take a couple days and trader’s interpretation to gather support for further gains.

Major Support: $3.16-$3.148, $3.136-$3.024, $2.93
Minor Support/Resistance :
Major Resistance: $3.372, $3.467, $3.554, $3.787-$3.831, $4.063, $4.086

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Lower Low Established

Weekly Continuation

On the previous Friday (01/09) February fell $.238 while 1,084,681 contracts changed hands and open interest increased an extraordinary 53,147 contracts. The only explanation, characteristic of such extremes in market internals, is overly enthusiastic speculative short selling. On Monday the late coming short sellers were taken to the woodshed. With February gaining $.240 nearly Friday’s loss, open interest fell 37,369. On Tuesday as the prompt traded the week’s high but faded to a gain of only a penny the total number of contracts outstanding fell another 7,515. Once that bloodletting (buying to cover ill – timed shorts) was complete February suffered a $.299 loss and began the expected decline toward establishing a lower low and testing support bracketing $3.

Weather forecasts over the weekend turned dramatically bullish and the bullishness left a gap in the Holiday trade (expect that gap to be tested when forecasts modify). Prices rallied up to the 100 day SMA before backing off. Would expect that was fueled by short covering after last week’s declines.

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It Was A Lower High?

Daily Continuous

There was a lower high with yesterday’s trade, but I would of liked a test of $3.55-$3.60 as a solid lower high before the collapse of the gains sending price to a lower low. Guess the storage release has a bearish bias. Lower targets have not changed from the beginning of the week.

Major Support: $3.16-$3.148, $3.136-$3.024, $2.93
Minor Support/Resistance :
Major Resistance: $3.372, $3.467, $3.554, $3.787-$3.831, $4.063, $4.086

Perhaps Setting a Lower High

Daily Continuous

Suggested in the Weekly section last week that the declines could go straight down but I urged a more structured decline though the process of trading a lower low followed by brief rallies to set a lower high. Looks like this process may be taking establishing this approach.

Major Support: $3.16-$3.148, $3.136-$3.024, $2.93
Minor Support/Resistance :
Major Resistance: $3.372, $3.467, $3.554, $3.787-$3.831, $4.063, $4.086

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Bearish Bias Likely to Continue

Weekly Continuous

Prompt gas traded to a gap lower to begin the trading year on the second trading day of 2026. February managed to fill that gap after testing rising trend line support (from the August – September – October lows), but could not rally further than the violated continuation 40 – weeks SMA and last week’s close before reversing lower. February’s second test of rising trend line support was a resounding failure-the prompt plunged to the lowest price in eleven weeks, and did so with a substantial increase in average daily volume and open interest.

Looking to test the long – term defining uptrend line drawn from the ’24 – ’25 lows would occur coincident with maturity of the short – intermediate term cycle (and the anniversary of the March ’25 price spike) in mid – March. The current value of the slowly rising trend line is +/- $2.930. The current value of the March contract is currently $.535 discount to the prompt, and is well below that support zone. March is currently testing the continuation August low ($2.622 v $2.634, March’s 01/09 close).

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Bearish Bias Rocks On

Daily Continuous

Define the technical aspect of the price movements last week in the Weekly section. Let me summarize – Bearish Bias and likely to continue though declines may not be quick follow the concept of lower lows and lower highs.

Major Support: $3.16-$3.148, $3.136-$3.024, $2.93
Minor Support/Resistance :
Major Resistance: $3.372, $3.467, $3.554, $3.787-$3.831, $4.063, $4.086

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Testing the Support Zone

Daily Continuous

Mentioned in the Weekly section that prices seemed to be destined to check the support zones in the near future. Welcome to the near future as prices melted down to set a lower low but had a brief rally by the end of the day. Market seems to looking at fundamental data coming out at the storage release to add to the bearish bias.

Major Support: $3.57-$3.546, $3.334,$3.16-$3.148
Minor Support/Resistance : $3.489,$3.467
Major Resistance: $3.787-$3.831, $4.063, $4.086

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Negative Bias Returns to Gas

Daily Continuous

Go into the many aspects of why the market flipped to a negative bias in the Weekly section — but all you need to see is that prices are down $.15 and challenging support zones in the early Sunday trade. Not sure how this will track (1: an immediate decline during Jan or 2: or a series of lower highs and lower lows) but the market is clearly setting up for the Q1 lows to be established. My guess is the latter with the low occurring next month.

Major Support: $3.57-$3.546, $3.334,$3.16-$3.148
Minor Support/Resistance : $3.489,$3.467
Major Resistance: $3.787-$3.831, $4.063, $4.086

Two Weeks in One

Weekly Continuous

The analysis and comments on the market and its behavior will look at the entire two week period of time from my last Weekly published on Dec 22nd (before the Holidays).

January traded it’s pre – expiration low at$3.797 before nearly a dollar rally into expiration ($4.721) and going off the board at $4.687. Settlement was $.263 higher than December and the highest monthly contract settlement since January ’23 at $4.709. When January went to settlement February was offered at $3.986, creating a $.701 discount. February is typically offered at a discount to January, but $.701 is historically a little excessive. A year ago at January expiration Feb was $.234 discount to the expired prompt. Readers will likely recall that the new prompt gapped higher then retreated to close that gap before surging to a January high of $4.369. After volatile trade…that continued through the end of Q1, February ’25 went off the board at $3.535…a little more than a dime discount to January settlement.

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