Prompt August, which had already closed below a short/intermediate – term trend line got off to an inauspicious beginning. On its first day August closed below its 50 – day SMA that it had closed above each day since May 3rd. On its second day the new prompt traded through its to date June low ($2.656 on 06/04) and then its post – Memorial Day low ($2.605 on 05/31)…and settled for the week below both of those of those lows. It is hard to put a bullish spin on that but there are a few mitigating factors. One element that should be made clear is that the behavior last week (and month) did provide an interesting range for the upcoming August contract as shown above. Similar to the July contract, there is a nice double top and now a solid test of the support zone is developing. Expect this range, which falls nicely into the range the market has maintained this spring (Continuous basis).
Weekly Continuous
The expectation was that the expiration process would continue the trend of being well offered and test the major support zone ($2.60-$2.50). It did not quite make it (the expiration day low was $2.613), before settling not so much higher at $2.628 ( a $.135/dt than June). From a technical perspective- prompt gas did test the wider zone of support between +/-$2.450 and $2.640, which included 50% and 61.8% retracement of the rally from its February low and August continued to test that zone after July was off the board.
