The strong market showing has finally resulted in a push beyond 19.00, however there was no immediate continuation of this move with initial trading today seeing March’23 slip back down to the mid 18.80’s. Specs were never likely to let the market slide too far and so defensive buying emerged to pull prices back up towards overnight levels by late morning, preparing the ground for the larger afternoon volumes to continue the speculative momentum. So it proved to be with some sharp buying emerging from the US to send the price aggressively higher and fill in an assortment of scale selling in reaching beyond 19.20. The progression also aided the March/May’23 spread back out to 1.00 points, a modest increase in the circumstances, though with some solid scale selling continuing to be seen progress stalled for both the spread and flat price as the spec buying eased up. A correction back towards 19.00 on long liquidation / profit taking was then picked back up, and with specs determined to maintain the gains we approached the close within proximity of the highs. Another aggressive push took place ahead of the call with March’23 surging to 19.43 as a result, providing a strong settlement level at 19.38 before some end of day book squaring dropped prices back on the post close. This leaves the market a mighty 1.88 points above the lows of 28th Oct, a remarkable turnaround which may not yet be over, though with the momentum largely reliant on the specs and the fundamental outlook unchanged there are questions still as to whether the move is sustainable.
A weaker opening was soon picked up and in quiet trading the morning was largely spent consolidating near to overnight levels. A dip followed ahead of the US-day getting underway and led to an intra-day double bottom at $533.90, before a sharp reversal on spec/fund interest saw the price quickly move up to record new highs. These higher levels were maintained for a period although the market started to struggle to move beyond $520 with some better selling in place as producer scale looked to take advantage of the opportunity. With specs still being the prime market driver a correction on day trader selling was to be expected, however it was soon picked up with the core longs determined to try and build on the recent progress and ensure a strong conclusion. In the event we saw a more spectacular ending than expected with an aggressive push to $524.00 (matching the high of 18th July) and settlement at $523.70. This provides a platform for specs to continue driving the market in the near term though following such a sharp rally overbought technical factors become an increasing consideration. Dec’22 remains steady as we continue towards next weeks expiration, ending the day at $543.50. Open interest remains relatively high at 20,865 lots, though with more than 11,000 lots changing hands today we would expect a reduction in that figure tomorrow. Dec’22/March’23 was again confined to a range either side of $20 with buyers and sellers well matched, ending the day at $19.80.
