NG December January spread

The momentum for the December January NG spread has turned positive as the spread has narrowed in connection with the sharp rally seen in the flat price futures.

The spread's resistance at 22.5 cents has been pierced today.? Above this resistance lies at the recent high at 20.6-20.9 cents. Further resistance is then seen at 19.5 cents. If the December futures were to challenge the high at $3.90 seen in August, we would not be surprised to see the December January follow suit and challenge the high it saw in early August at 17.7 cents.

Support for December versus January lies down at 23.5 cents and then in the 25 cent area.

A colleague suggested earlier this week that the spread should narrow, favoring the December, as that month becomes the spot futures contract as of Monday, when we are likely to see a spike in cash prices when the cooler air arrives.

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