There have been few tedious sessions in recent times, but this morning’s effort was slow to say the least with Jul’23 spending several hours in the 23.80 area having pulled up from an early 23.64 low. Such action is to be expected as the market consolidates the significant gains seen already this month, and with no significant selling at current levels there is little reason to believe that the higher levels won’t endure for the short term at the very least. All remained quiet into the early afternoon where some light spec/algo activity appeared to move prices back towards 24c, though the trade and funds were nowhere to be seen. Things changed significantly soon afterwards however as new impetus arrived, presumably being driven by trade/consumer pricing once again with recent weeks suggesting that funds will not be buying in any noteworthy volume at these high levels. Selling remains limited to light scales and so despite volumes remaining moderate, even when accounting for the array of day trader and algo activity that populates the market each day, prices moved to new contract highs across the board. Through the final couple of hours there was no sign that the longs were satisfied with their achievements as they continued to relentlessly push the market and squeeze the shorts, culminating in daily highs a long way above the former marks with Jul’23 reaching 24.86 (1.22 points above the morning low) and the soon to expire May’25 contract seeing 25.37. Settlement was only a short way beneath these highs with Jul’23 closing at 24.74, and while we have detached from both the macro and the current known fundamental picture this move shows no sign of abating for the time being.
Aug’23 started the day extremely positively with a push up to $683.80, however the move was again built upon limited buying volume and as things settled down, so the morning became one of quiet sideways trading either side of $680.00. Ahead of the US day commencing in full flow, the market found some buying to take the price up to $687.90, however as with the rally last night there was little traction for the move one the initial buying wave concluded and so the progress stalled. For a while, the price tracked sideways on lower volumes but with the day traders still holding onto longs something was going to give and so a correction back to $678.00 was not unexpected when it occurred. This ought to have put the market back onto the front foot however while the picture remains firm there is still a lack of substance to the buying and so once more long liquidation sent us back from the highs with a slide to the upper $670’s were we once more stabilised. Daye trader/spec activity continues to play from the long side and so the market nudged up through the range during the later afternoon, however there was limited volume and so the earlier parameters remained untroubled, eventually ending a day which at one stage had promised more with Aug’23 at $680.10.
