November was the eighth straight monthly contract to rally into expiration and settlement, the highest settlement since December ’08 went off at 6.888, was the eighth consecutive higher than the immediately preceding month. After last week’s gap lower (5.379 – 5.400) this week’s gap higher ($5.379 – $5.462narrowed on Friday to $5.379 – $5.400) left a rare “island” reversal. Expect that gap to be closed this week. The market hasn’t seen one of those since the November ’19 high. Whether this “island” survives or not, the current conditions that led to its occurrence are significant technical factors similar to what they were nearly two years ago.
During calendar October prompt (Nov) gas defined or perhaps more reconfirmed old support and resistance levels. Both the September and October highs were within a zone of resistance between the January ’09 and February ’14 highs, the October ’21 low between highs traded during Q4 ’18. Still, within that wide area prompt gas continued the more than a year-old pattern of trading higher lows and higher highs (discussed in the fall of 2020 and re-confirmed this past summer at Ecom) the primary characteristics of an uptrend. Unless and until that pattern is broken and the support zone between the September and October lows ($4.825 –$4.735, the last higher low) the technical assumption is that the uptrend will continue to higher highs.