The day commenced positively with May’23 printing up to 21.27 on the opening run, although the gains were short-lived as the market quickly reversed before settling down to consolidate just beneath 21.10. Friday saw the COT data for 21st February published, and as expected it saw only minimal change in the net fund/spec position, a small reduction having left the long holding at 197,825 lots. The next couple of reports will be the ones that will provide a truer picture as to the extent of the spec/fund and trade buying into the recent rally and these should be issued this week to bring a more accurate view before the data becomes fully up to date next week. With limited participation from both sides of the market we saw prices continue to drift lower during late morning before a more concerted burst of liquidation from the US accelerated the slide to 20.70 before stabilising in the same area in which we found support last week. There has been no disguising the desire from longs to force home the advantage in recent weeks so that a fresh push which launched May’23 away from these lows and back to 21.17 in quick time was not too surprising, although on this occasion there was not the follow on buying to maintain the recovery. Instead, the market fell back to spend the final couple of hours towards the lower end of the range, recording sizable losses as May’23 settled 20.80 though not so bad as to undo the technical structure.
Aggressive opening selling sent May’23 down by almost $5, and though the market found some supportive buying to bring the market back to the upper $580’s for a while the recovery could not build and so by late morning the picture had weakened, and we were seeing new daily lows. The market has done a lot of good recent work, with funds sitting on very nice positions having held/rolled them for a long period of time, and so it was the smaller specs who made the next movement with the weaker picture leading them to some long liquidation that sent prices to lows at $580.10 as the afternoon got underway. Over recent weeks we have consistently seen defensive action ensure that the market is picked up and so it proved again today with the afternoon bringing another wave of support which pulled prices away from the lows and reduced the net losses to minimal levels as May’23 touched $589.20. This coincided with similar efforts for the No.11 and so had minimal impact upon the white premium values that maintained in the $123/$124 area, although it did bring the May/Aug’23 spread back up to $13.00. The recovery was not maintained however, and the remainder of the session played out back down through the range, eventually concluding at $582.60 to leave the market in consolidation mode though with the wider structure still positive.
