In my absence, prices decided to test the support at the Feb lows and break below it briefly. There have been some ugly monthly ranges traded since prompt gas turned down last August, the chart for calendar March is as ugly as any. After a technically positive calendar February prompt April promptly traded through the previous month’s high on March’s first trading day then before its tenure was over plunged through its low creating the first “outside” March since 1998 and the first ever to reverse to the downside (in ’98 the prompt first traded through the Feb low before rallying through and closing above the Feb high). The continuation monthly bar could have only been uglier if the close had been below the Feb low which owing to May’s premium over expired April and Friday’s only higher daily close of this week,, it wasn’t. The monthly chart of May gas did achieve that benchmark and is even uglier as it closed lower for the week, month, and quarter below its February low.
As patently bearish as the market seems, and expecting the consensus of technical indicators had weakened further from the prior week’s negative to neutral bias “ to outright negative, close examination indicated that was not the case. Almost none of those indicators confirmed the lower price low which either means they are out of step with reality and need time to catch up although recent price ranges have been relatively modest so that should not be the case, or the subsurface dynamics are diverging from the persistent price weakness. For example, last week average daily volume accelerated as April fell toward a new low weekly close and as has become the custom closed below the previous week’s low. Market internals…volume and open interest, which also continued to increase as price fell, strengthened the technical presumption that April would be offered lower before going off the board.