The opening was rather calm with prices flitting either side of unchanged through the morning on calm volumes, seemingly setting the tone to try and build on yesterday’s recovery and challenge the contract highs just a small distance overhead. Some minor weakness began to show at around noon however and it became apparent from here that the funds either lacked the ammunition or desire to make another push higher leaving the market to instead retrace back down through the same range that has prevailed since Wednesday. Support continued to come through consumer pricing, particularly at the front of the board where concerns have increased given the limited time opportunity ahead of this month’s expiry, and this initially held March;’23 ahead of yesterdays 21.30 low. After a while, this support gave way and a few small sell stops were noted as some recent longs closed positions, sending the market down to sit ahead of the next technical support level, the former contract high at 21.18. Some defensive buying kicked in through the final couple of hours to ensure that this level held and so preventing further sell stops from being hunted out, though any efforts to dress the close and take prices back up into the range had no success. Closing prices showed March’23 at 21.24 and May’23 at 19.99, and while the were some late short covering on the post close from day traders the take on the last 3 days action suggests we have seen the highs for the time being at least. Tonight’s COT will be keenly anticipated given that it will show the impact on all sectors through the 200-point rally with estimates varying as to just how many longs were added between the spec and commercial sectors.
A calm opening saw some supportive buying which led initial trading to take place a dollar either side of unchanged levels, yesterday’s recovery having brough an element of confidence back to proceedings. Gradually however the buying dried up and with no real spec element behind it this allowed prices to slip by a couple of dollars on otherwise tedious morning trading. With the market having done so much over the past two weeks there was some anticipation that we would see defensive buying to ensure another strong close for the weekly chart, however the afternoon instead started to see an element of profit taking / long liquidation which sent prices slipping back down the range, retracting yesterdays gains. Momentum was being generated from the spot where March/May’23 continues to haemorrhage losses, slipping to a small discount during the morning that grew as the spread roll volume increased over the afternoon. With an hour remaining Matc’23 had sunk to $553.10 while the spread was trading to -$4.00, by no means critical but a further sign that the move may have topped out for now. There were moves made at the lower end of the range through the final stages to pull away from the lows however they yielded no real success and the week ended with May’23 valued at $555.30 and March/May’23 valued at -$4.00 having made a new low at -$4.80 in the final minutes.
