January opened with a gap sharply lower from the previous week’s close at $6.281 to $5.900, through support defined by a series of lows traded by January gas between 11/09 and 11/16 ($6.131 – $6.260) and January’s November low ($6.011). The downside momentum generated by the exceptional gap triggered a substantial volume increase and a near immediate test of the continuation November low ($5.614 corresponding to January’s October low, $5.645). On a daily closing basis, prompt gas held the November low on Monday ($5.624 vs $5.614) but trade suggested that those lows were vulnerable to test the June/July lows $5.325 – $5.357. Last week’s low was $5.337.
Prompt January held the support and reversed higher but the odds of closing the weekly continuation gap left on Monday, which remained open between $6.052 and$6.221 were so remote the potential was not even mentioned in the Daily. Sure enough, it was and then some. In a year of improbable occurrences (the first ever annual high during calendar August, so far, for example) January rallying $1.054 after a high – volume gap down followed by the test of lows traded during the summer was one of the more near – term remote probabilities.