New prompt July ended the week at $2.417, $.236 premium to expired June. July almost always commands premium over June but $.236 is the most generous EVER awarded. The historical fact is that July almost always gives up whatever premium is awarded usually doing so during the first week of June. Candidly, there is no clue for the reason that July has been bid with historically extraordinary premium, but history tells us that July gives it up, and judging by recent history, pretty quickly.
Since the recovery from the February low, trading just below $2, and the early March failure a few ticks above $3, we have discussed the likelihood of the construction of a range between the two extremes (even though the March low was a hair lower see chart below) . During the construction of semi – enduring price ranges rallies are accompanied by when the appropriate strategy is to ignore short covering rallies and wait to buy weakness that takes the prompt to test identifiable support zones while being wary of premium.