Author: Willis Bennett

Declines Run Low on Volume

Daily Continuous

The start on Sunday night stated with a big decline and extended those declines in the middle of the night — only to find a gradual support bias that took prices back to where the initial opening decline began the trade. Again, the range has likely been developed during the last week or so. Mentioned it in the Weekly last week. Use the option market for short term gains in the next week as volume based bias is unlikely to present itself.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.307 $3.392, $3.487, $3.527–$3.563

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Prices Testing Lower Range

Daily Continuous

Go into the expectations in the Weekly section bu suffice to say, that prices are likely to continue in the recent range that was discussed last week but mentioned again in the Weekly. Prices are starting the Sunday trade lower — so expect a decline lower to the Support zone.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.307 $3.392, $3.487, $3.527–$3.563

Lack of Commitment

Weekly Continuous

January rallied nearly$ .50/dt…where it failed again at its 40 – day SMA and just short of the November high ($3.559 v$3.563). Prompt gas traded a range of $.490 between Tuesday and Thursday with January closing $.02 above its opening for the week ($2.280 v$2.260). For the second time in three weeks that prompt gas has closed a few ticks higher than it opened, continuing the interpretation of an indication of indecision.

Average daily volume spiked…with an estimated 3.85mm contracts changing hands (v 2.41mm last week). Increasing volume as price works higher is technically constructive.

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Storage Release Brings Bulls Out

Daily Continuous

Not sure that the bullish storage release changes perceptions but it is clear that the withdrawal caught a few off guard. Not sure if it was short covering as the CFTC report does not come out until Friday and the open interest data is delayed be one day. Look for confirmation from the trade today and on the open on Monday for a longer term bullish bias.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.307 $3.392, $3.487, $3.527–$3.563

Trying To Test Resistance

Daily Continuous

Prices decided to rally and started to test resistance before the storage release tomorrow. Perhaps some folks have an idea of what is coming. Not sure — I don’t and can only relate that the recent rally in nat gas could be related to the overall strength of commodities as the weather is not supportive to this level.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.307 $3.392, $3.487

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What Can Be Said — Consolidation

Daily Continuous

Prices semi tested the low side and now it looks to want to test the resistance area of the range. We’re just going to have to be patient here as price choose the bias.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.16, $3.307 $3.392, $3.487

Prices Come Off From Early High

Daily Continuation

After the strong start off of Sunday night, price action was pressured to give up some of the gains, closing in the middle of the range. Would expect additional tests of both support and resistance during the months actions. Quiet range trade environment this month.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.16, $3.307 $3.392, $3.487

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Back Into the Range

Weekly Continuous

January fell to test the target zone between $2.950 – $3.050 (mentioned in last week’s Daily), which corresponded to the upper boundary of the trading range constructed between early September and mid – November. The current prompt bounced from that clearly defined support, retested, then well – bid into the close, finishing the week above it. Prompt January closed $.289 lower, the first continuation decline in seven weeks. Average daily volume fell nearly 25,000 contracts from last week’s holiday volume (which was about 80,000/day less than the previous week). Declining volume as price falls is technically constructive (suggesting that the price decline is more corrective in nature. Accelerating volume would indicate that at least an intermediate term high is in place and unlikely to be retested. Total open interest for the five days (not from Thursday through Thursday because of the holiday) fell an estimated 7,500 contracts which is also technically constructive.

Typically the price of prompt gas falls from a mid – November/pre – Thanksgiving high (this year on 11/22 at $3.563) to an early December low. Wednesday’s low (12/04) at $2.977 has the earmarks of a typical early winter low.

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Off To A Strong Start

Daily Continuous

Prices closed the week just off of key support areas and on Sunday night prices are up $.20. No clue what that is all about but so be it. Expect the range developed over the last couple of weeks to hold this week and into the contract expiration (depending on events in the next couple of weeks).

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.16, $3.307 $3.392, $3.487

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Consolidation Post Decline

Daily Continuous

As discussed two days ago, the expectation of prices testing the $2.95-$3.00 zone has occurred and yesterday, after the storage release there was a brief counter rally that took prices up on to have them be sold during the remainder of the trade day. Seem like the market is starting a consolidation process in order to define the upcoming bias.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $3.16, $3.307 $3.392, $3.487

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