Daily Call

Another Sunday Night Gap

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Prices bounced off the lows on Friday and showed a little strength late in the afternoon. Now they gaped up and are challenging the gap from the expiration and discount provided the Feb contract. These Sunday night events have not held there salt lately– so I would be patient in jumping on this wagon. Typically, either the high or low of prompt March trades during the last couple of days of January or the first few of calendar February. Nine of the last ten prompt Marches have conformed to that tendency. Seven of those nine were highs, two were lows (’20 was the exception).

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.34, $3.39, $3.829, $3.92, $4.00, $4.201, $4.378-$4.394, $4.461,

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Bullish Storage — But Prices Test $3.00

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So let my confused mind sort through this — storage withdrawal numbers were way above expectations (highest I have on record), and prices declined? Whatever. Prices want to test the $3.00 mark that I discussed two days ago– so lets see if they have the power.

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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Declines Accelerate Going Into Expiration

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Prices declined and accelerated to close some of the gap between Feb and Mar contracts. Prompt has now lost over $.60 this week and I would not expect the declines to cease during expiration. My interest is on March which will likely test the $3.00.

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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Price Declines Challenge Trend Line Support

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Did not see that collapse coming – but the support trend line held on the Continuous chart but was destroyed on the spot March contract. The Feb contract reduced the gap that will occur on expiration but nothing has happened that would concern me from a technical standpoint for me to expect a major break out of the range.

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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Temps and Storage Allow Weekly Close at $4.00

Daily Continuation

Weekly Continuous

The most interesting near term technical factor is the trend line rising from the continuation October low (see Daily chart above). Similar trend lines rising from the December lows of February and March gas (See March gas below) were tested during the past week. Each time their recovery from the rising support attracted less volume.

Going into expiration period over the next three days. Expect the trend line to continue to guide prompt gas higher toward resistance defined by the zone between the December and January highs. Should the trend line (support) violation break — it likely to announce the beginning of the decline toward a late Q1/early Q2 seasonal low. Expect significant moderation of price as we progress through Q1. The average decline from Q4/Q1 highs to late Q1/early Q2 lows is a little more than 40% for successive prompt months, less for deferred months. There is likely to be a substantial “expiration” gap after February expires. That gap will provide the market important resistance to an extension of any rally in March gas.

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Strong Close to Week–Not Sure Enough

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As we wrap up the Jan trade and put the Feb contract to bed, I am startled at the behavior with strong days of volatility, but over the month prices moved within a $1.00 Range (less than 30%). Must be aging faster than I thought–or the market is changing (both thoughts are accurate). Go into expectations in the Weekly section and will not attempt to give you a expiration range (especially because prices are down $.20 on Sunday night)– I can only recommend that you keep a eye on the March contract pictured in the Weekly section. That trend line may prove important.

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

Strong Run Into Storage

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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

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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

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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

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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