Yesterday’s correction from the 26c area was more severe than some had been anticipating and was so severe that it provided scope for a further technical move down through the range. A lower opening suggested that this would likely be the case with a distinct lack of consumer buying through the early stages illustrating a lack of confidence which has not been evident for some time. The lack of buying enabled the Oct’23 contract to fall by more that 0.40 pts on relatively low volumes before finding support, though even when the market attempted to bounce it was apparent that it had limited scope, being driven by short covering while spec/funds buyers were nowhere to be found. Further losses were recorded as the market moved into the early afternoon, and while there was a short covering bounce soon after it proved to be a blip in the trend which promptly resumed its lower path. With support non-existent until this month’s 24.01 low the slide gathered pace, aided by the pressure being applied to the nearby spreads as Oct’23/March’24 traded down to -0.04 points, while the soon to expire Jul/Oct’23 reached an intra-day low at -0.15. Session lows were recorded for Oct’23 at 24.16, with settlement being made a little way above at 24.29 following some late short covering. Having lost more than 2.00pts from Wednesdays highs and recent lows a small way below it seems likely that the market may start to see some buying interest reappear when we resume, possibly allowing the Jul’23 expiry to take centre stage next week if the 24c area can maintain.
The correction seen yesterday might have been expected to bring some buying interest into the market, however there was no sign of any fresh interest from consumers nor any hedge lifting this morning as Aug’23 immediately dipped towards $670.00. Sentiment has changed significantly this week and with buyers still proving hard to find the market took another leg down to $665.00, just beneath the early June lows but finding a degree of support for the first time today. With the Aug’23 spreads not under the same level of pressure as yesterday there were efforts made to try and hold the market up, however these petered out in the $670 area and as we moved through the afternoon the picture was looking vulnerable again. The lower trend resumed, with the flat price falling until the final hour when it bottomed at $655.00, the lowest level traded for the Aug’23 contract since early April, aided this time by the spread which had belatedly come back under pressure to trade down to -$7.90. Some short covering was seen during the later stages as traders closed out positions ahead of the weekend, with Aug’23 settling at $657.10, a technically weak finish which leaves scope for further correction.
