Weekly Continuous
Glad to have the Holiday, as if I would of published on Monday due to the market close from last Friday– I would have missed the additional $.13 loss that happened in the light volume trade yesterday. Prompt gas fell with increasing volume to and through the gap to support. The “bounce”, such as it was, came from support and it wasn’t much of a bounce. November failed at first resistance, the “outside” day reversal low November traded on 09/26. Reversing again from that resistance with significantly less volume left the prompt below its 50 – day SMA and likely set the stage for a test of support at a lower price level.
The failure left a fourth lower high. The first was in November ’22, which was lower than the August ’22 counter seasonal high; the second was the October ’23 Q4 high. The third was in January, the fourth last week. Unless/until prompt gas conclusively breaks from that pattern, the technical presumption is that declines and failure at the resistance zones will continue. It also is likely to effect the premium afforded to deferred/distant deferred contracts as they will dissipate as their maturity dates draw nearer
After gaining $.313 over the two weeks ending 09/27, November declined $.270 over the next ten trading days. From its close on 09/12 until Friday’s close November is exactly $.001 higher. Despite extension of the Q4 rally to the October 4th high at $3.019 that is not a characteristic of a continuing bull market. The deferred months, which all had gained modestly previously (while November ended lower) the deferred contracts gave up the lion’s share of gains from their August/September lows.
The consensus of technical indicators, which moderated somewhat last week continued to deteriorate. The continuation weekly RSI, which two weeks ago ended within its historical EXTREME zone is negative and not yet oversold. The daily RSI, which showed a confirmed bearish momentum divergence at the highs remains negative and still above its extremely oversold zone. Average daily volume increased significantly as prompt gas fell. Total open interest fell along with price, which is at least a mild technical positive. As mentioned last week, it is interesting that the total number of contracts outstanding is almost the same as at the beginning of August. My guess is that suggests that there is no real conviction on the part of longs or shorts…which is characteristic of prices remaining in a definable range.
Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605
Minor Support : $2.507-$2.44, $1.856,$1.89-$1.856
Major Resistance: $3.00, $3.16