Two weeks ago prices broke below the 20 Week SMA only to close above this key area which has held the market (closing basis) since the week of July 13th. Last week’s bounce was an indication that January had traded its low prior to expiration. Successfully trading through those trend lines will be further confirmation of that low while also going a long way toward repairing the technical “damage” to the charts that occurred with the declines endured from the first week of November failure at the October high. Adding to this correction of damage was the first week of December “outside” week reversal.
While the collapse has been averted for now, there remains significant resistance that January will have to address. On a continuation basis, if prompt gas trades to 2.760 it will have regained 38.6% (Fibonacci retracement analysis) of its decline. January must trade to 2.803, just a penny or so above its June and July lows (2.778 – 2.785). January has settled lower than December in each of the last three years (December ’20 closed settlement at 2.896)