Daily Call

Was resting during most of the trade day so consider my astonishment when I looked at the screen in the evening when prices are down $.20. Not sure what has changed in the trader’s eyes, but the movements look like they want to test some of the support zones from $7.90-$7.51.

Major Support:$7.50., $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $8.47-$9.60

Under the weather tonight– can’t even stay awake to watch hockey. Nothing to add no real solid support zones until prices decline into the low $7.00’s.

Major Support:, $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $8.47-$9.60

Regardless of lack of interest (volume) prices just grind higher. As mentioned yesterday, the movements are not a general consensus of rising expectations prices this summer, but seem to be rather oriented towards a bias from trading funds seeking an outcome. The suggestion remains keep trades on a daily time frame- not leaving position on over the night.

Major Support:, $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $8.47-$9.60

What a day of trade– prices took the cue from the Sunday Silliness and rocketed prices up to the highs of $8.183 only to find significant selling that took prices back below where they started on Sunday. From there– prices rallied back up above the $8.00 level but on lighter volume. Don’t usually show the 5 minute chart that shows price movement in 5 minuted increment but felt it told the story I wanted to provide today–

On the top of chart is the price and on the bottom is the volume associated with the 5 minute price action. Notice the strong volume in the 8-9 am time frame (CDT) only to collapse on good volume for the rest of the morning. Then on lighter volume prices gradually rallied back up to the close just above $7.95. Why is this important– you need to know that this volatility is being caused by light trade not “general consensus”– that is why the divergences were discussed in the Weekly section. Be very careful buying in or selling early directional movements.

Not sure what fundamental news forced price up to $7.872, but that is what happened last night on the open. Refer to it as light trade silliness with trade trying to force some sort of reaction when the trade is light and easily effected. Was provided some interesting analysis from a good friend that was put in the Weekly section– going to give you a choice of what will be occurring in the near future.

For over a year every prompt contract has weakened around mid life as prompt in its tenure– perhaps that’s what we saw this week. May fell 28.5% from the 05/06 high to the 5/10 low. That was the most since the January contract fell 34% just after December expiration. March fell 22% after the spike into February expiration to the earliest pre – expiration low of the last 14 months (02/11). Expect prompt June to continue the trend of supported prices into expiration. There may be some additional losses prior to the historical monthly prompt trend, expect those to be short lived.

Love the occasional text messages from you all– yesterday a comment from an older client struck me with his limited analytic capacity as he wanted to challenge my use of the word “consolidation” describing the trade. Consolidation is a term in reference to the volatility during the day– The last two days of trade have had ranges of $.53+and $.42+ which are well below the ranges since the beginning of the month between $.60-$1.32+. Is this consolidation– yes — is the range greater than when prices were consolidating around $4.00 between $.15-$.30– yes. The key is the level the price is at compared to the recent history of trade. Another interesting comment that I received from a couple of readers and they were mentioning that consolidation would leave to another decline downward. I can not subscribe with that theory– periods of consolidation occurs to set up the next move whether it is up or down. The recent reversals downward may suggest a break down — but I would also submit that the general bias in this market remains bullish having reversed off of highs only to test support at major support ($6.40) only to fail and rebound to where we are.

Major Support:, $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $8.47-$9.60

You will notice that the 20 day SMA of the June Contract was broken during trade yesterday only to be tested as support late last night. This area (up to the trend line in the Continuous chart above) will likely hold the trade during the week (without some surprising data on storage). This may provide the long awaited consolidation trade that I have been looking for rather than the $.40 trade ranges of late. We shall see.

Major Support:, $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $8.47-$9.60

As suggested yesterday – prices went down to test the major support area but instead of developing a consolidation range, the market decided to run back up to and break the trend line and the 20 day SMA of the prompt June contract as discussed earlier. This volatility is wild when the range is near a $1.00 from low to high. Keep trades active for the day but don’t expect longer term gains from length or shorts in this environment.

Major Support:, $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $8.47-$9.60

Prices continued from where they ended on Friday and lost another 12% yesterday taking the prompt below $7.00 (though that level was holding in the late trade). Now prices could settle in and try some consolidation but don’t hold your breath. The trend line on the Daily Chart will likely give us some short term directional bias. This support zone (trend line) may hold down to $6.40 will create the bottom side of the range for the remainder of May.

Major Support:, $7.00-$6.855, $6.411-$6.392, $6.247-$6.278, $5.27-$5.199, $5.001, $4.40-$4.26, $4.187
Minor Support: $6.00, $5.063, $5.04, $4.88, $4.60-$4.557
Major Resistance: $8.47-$9.60