Prices traded down to interim support before garnering the strength to form a nice rally. Support from declines were found by the lower closing low suggested that significant support presented by the continuation 50 – day SMA and the trend line rising from lows traded in late May and late June. As noted last week this was the initial area for prices to be tested.
A mild warning here, in addition to that reasonably formidable technical support being tested and rallying –the last five expiring contract months have shown a consistent tendency of rallying during the final week of their tenure. Historical analysis continues to indicate that prompt gas…whether it is September or October, is vulnerable to more significant decline but given the tendency to rally into expiration…every month since and including February except March has (Feb closed higher each of its last three days, April three of the last four, May four of the last five, June two of the last three, July each of its last five and August eight of its last nine), it seemed prudent to alert traders of that trend that they have forgotten.