The market has bounced back impressively this month however there has been a cooling since printing to $705.00 on Monday that suggests some consolidation may be required to maintain the technical strength longer-term. Today’s session began in that exact fashion with Oct’23 printing either side of overnight initially ($691.60 / $696.00) and then remaining within that narrow band for the duration of the morning. The early afternoon saw no change to the sideways pattern until a move to new daily lows set off some spec selling/long liquidation which sent the price tumbling to $685.40 on modest volume of just a few hundred lots. It was clear that there is little consumer support at current levels and having attempted to hold for a while the market stepped another leg lower to an eventual session low at $682.30. This clearly upsent some of the longs who responded by punching the market back up by several dollars, likely looking to protect the technical credentials having fallen beneath the initial $687.80 support level. This exercise was not wholly successful with Oct’23 ending the day at $686.30, and despite the Oct’23 white premium remaining steady at $149.00 it seems the market may have to settle back into a range for the time being.
It was a lethargic start from the market today as Oct’23 traded marginally lower initially, and though some light buying followed in to pull the price back up to 24.79 there was no significant interest in continuing the move. This left values to edge along sideways within a narrow range, the only change to the early parameters over the next few hours coming from a brief push down to 24.59. Outright values continued near to overnight levels as the US morning got underway, though soon after they took a negative turn as a move to new daily lows triggered some heavier liquidation that sent Oct’23 quickly into the 24.30’s. This weakness also resonated to the front month spreads with Oct’23/March’23 slipping to -0.24 points, its lowest level since last October, and raising further questions over whether the flat price can forge its way back up at the present time. Efforts to try and bring the flat price away from the lows found only limited support with another decline to 24.15 following, though on this occasion a more robust defence was presented with Oct’23 being quickly bid back up to 24.50. The final hour then played out near to 24.40, limiting the overall damage though backing the recent view that we have found a short-term top with 25.30 suddenly feeling some distance away. Settlement was made at 24.39 for Oct’23 while Oct’23/March’24 was away from its lows at -0.20 points.
