I am at lost to explain but the market seems to be telling us that it will be rallying into expiration for the seventh consecutive month. Last week we had a bullish reversal in the weekly close after the declines the previous week on a bearish weekly reversal after trading a higher high. There is a difference in the two reversals as the weekly declining reversal was on a higher volume and declining open interest, suggesting additional declines last week. Those declines were extended early last week, extending below the Q4 ’18 highs, then reversed after the storage report on Thursday. Last week’s reversal off of lows was on much lighter volume during the rally.
My comments last week alluded to what to expect later in the Q4 and continues to suggest that the rally has further to go, but not sure it will occur immediately. If prompt gas intended to test the recent high in the near – term, there would have been more substantial volume during the recovery and rally last week. It seems more likely that prompt gas constructs a continuation “coil” between those two extremes defined by the reversals ($5.65-$4.73) create short series of lower highs and higher lows, while the daily volatility (including the extremely overbought condition- weekly RSI), moderate.
