Last week prompt June traded at lows and June had traded through the previous week’s low and closed there. While volume was lacking (average daily volume fell 80,000 contracts) the reversal with a weak close brings a presumption that the prompt will be offered lower when trading resumes.
Discussed in previous writings about the historically consistent weakness that brackets Memorial Day. Most often a pre – Memorial Day trades to a high between the 15th and 25th followed by a decline to a low between the day trading resumes after the holiday and the 5th through the 7th trading days of calendar June. Last week’s high on the 12th is a little early but not unprecedented. In 2016 and ’17 the pre – holiday high traded on the 12th (Memorial Day fell on the 30th and 29th in those years, this year on the 27th). Declines from the highs in those years were 12.63% and 14.46% respectively. The low prior to an early June rally traded on 05/26 in ’16 and a more typical 06/05 in ’17. From Monday’s high at $3.840 to Friday’s low prompt June has already fallen .535 or 13.9%.
