Daily Call

THAT Is A Short-Covering Rally

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The short covering started on Monday as open interest decreased as prices rose, but yesterday was the big run and I don’t have confirmation from the CME– but I expect a significant amount of short open interest left the market. It really means little to the trader as I am waiting to see gains in open interest as prices rally. We have witnessed these types of rallies in the last year only to have prices reverse back lower once the short were eliminated. From my perspective — thankfully, I had stops in just above the resistance area mentioned yesterday– so damage was minimal. Now I want to wait and see how much leg this rally can have.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $3.00, $2.87, $2.62, $2.47, $2.38-$2.26, $2.17
Major Resistance: $3.16, $3.48, $3.536, 3.59, $3.65

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Solid Short Cover Based Rebound

Daily Continuation

It is time to watch the rubber meet the road. The recent rally has been identified as the cold and extended cold coming, forcing some shorts to cover– but watching trade while watching the Championship game– I am witnessing some serious selling taking prices off the high $2.90’s. Have no idea as to the longer range forecasts and really care not. The market is at the high end of the resistance and will be looking at selling resistance.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.62, $2.47, $2.38-$2.26, $2.17
Major Resistance $2.786-$2.865, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

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Break Above Resistance Continues

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Prices broke above near term resistance and held strong through the end of the week. Due to the strength, I expect prices to remain firm today regardless of the late Sunday weakness showing the start of declines, regardless, the market is likely to remain range bound this coming week.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.47, $2.38-$2.26, $2.17
Major Resistance, $2.786-$2.865, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

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A Bullish Start to 2024

Weekly Continuous

The prompt opened at $2.605, creating a daily continuation gap above Friday’s high of $2.561 Despite February quickly filling the gap the indication that it had brought was validated by a reversal and follow through that left the prompt above January settlement and the first trading day of January high. Extension of the rally to test, and close above the continuation 50 – day (for the first time since 11/16), plus a weekly close above the 10, 20, and 40 – weeks SMAs AND the December high leaves $2.524 the odds on favorite for the January low.

While all of that bullish technical data points is important –it is not intended to suggest that prompt gas has kicked off on one of its periodic winter rocket rides, nor that the perennially amply offered February contract won’t back and fill from this first week of ‘24’s strong close. There is an abundance of well – defined resistance including but not limited to 50% retracement of the decline from the October – Q4 high and the violated trend line drawn from the April – May – June lows, between $2.906, the late Friday high of the holiday abbreviated week, and $3. It does suggest a change in the way traders are approaching the gas market from actively selling rallies to buying during bouts of weakness to test progressively higher levels of support. Since the 12/13 trade and reversal from $2.235 prompt gas has traded higher lows (defined as a higher low followed by a higher high) of $2.385 (12/19) and $2.412 (12/28) and now $2.524 (01/02) can be added to that list.

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Slight Break Out Above Resistance

Daily Continuation

Not sure you want to load up the bank on this slight break out above the recent range. The market trades on the weather reports so any long term positioning is rather risky. Short term (daily trades) can be profitable on a very short horizon.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.47, $2.38-$2.26, $2.17
Major Resistance$2.62, $2.786-$2.865, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

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New Year, Same Old Range

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Prices started with a bump early then just fell back into the old range– this market needs an issue to catch the traders eye — one way or the other.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.47, $2.38-$2.26, $2.17
Major Resistance$2.62, $2.786-$2.865, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

Range Action to Start New Trade Year

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Not a whole lot of technical data points to discuss in this range bound market. Discussed the historical aspect of January trade in the Weekly Section and highly recommend you review it. The market is likely to test the high end of the recent range and that will likely bring out sellers.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.47, $2.38-$2.26, $2.17
Major Resistance$2.62, $2.786-$2.865, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

First Action of New Year — History

Weekly Continuation

Have not sent a Weekly for two weeks due to the markets decision to trade in a fairly consistent range and that continues at the current writing. I wanted to share with the thoughts and history of a trader who provides me access to some of his thoughts during the year. I can promote and endorse his historical analysis as he has been tracking it since the gas market started trading in the early 1990’s,,,,

…each year at this time I write a review of what I came to call the January Phenomenon…because of its consistency and disproportional importance compared to the other eleven calendar months.  The following is not a lot different from the twenty five or so that it follows.

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Quiet Range Action

Daily Continuation

Apologies for the server meltdown yesterday but just was discussing the continuation of the recent range between $2.40 — $2.62 regardless of the discount afforded to Feb as the new prompt. No reason to change expectations and would just like to pass on sincere wishes for a prosperous 2024.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.47, $2.38-$2.26, $2.17
Major Resistance$2.62, $2.786-$2.865, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

No Fuss, No Muss, No Movement

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Can’t remember a Holiday period so quiet — sometimes the swings can be quite dramatic with the light trade — not so much last week and yesterday. This is now the first month’s expiration with a price discount in the upcoming prompt that we have had in a while. Don’t think it means or creates any major opportunity for the trade. Suggest letting Jan run a quiet expiration and evaluating afterward.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.38-$2.26, $2.17
Major Resistance $2.786-$2.865, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65