Volume expanded as this week’s rally filled a gap on the April chart left on 02/09 leaving a tiny gap between $2.766 and $2.775 still open.
The absence of volume as the new prompt extended the decline a week ago strongly suggested that the gas market was running out of sellers below $2.900 – $3.000. This week’s rally with substantially greater volume without gas reaching an extremely oversold condition supports that theory. Despite the decisive violation of the trend line rising from the ’24 – ’25 lows on a weekly and monthly closing basis, technically the market remains in a long – term uptrend. Up-trends are defined by higher lows and higher highs in different time-frames and trend lines are a convenient way to monitor their progression. The last higher low on an intermediate – long term basis was the August low at $2.622. It is likely that there will be a lot of support between that low and the to date April low, but expect it will be tested, either during calendar April or August. On a weekly basis the last higher low after a higher high was $3.006 (the January low after the December high) which was decisively violated along with the long term trend line. Last week’s rally was an intermediate term counter trend rally…a “correction” after last week’s lower weekly low and will be followed by a lower high and a test of the previous low. 38.2% retracement of April’s decline from its January high is $3.275 this week’s high was $3.280. 50% is $3.430.
