Author: Willis Bennett

New Near Term Range

Daily Continuous

For most of last month the market traded in a range between $3.60-$4.00 with some very brief breaks out of the range. It seems as though the market is developing a new range with the low of $4.00 currently in place. This week will add some confirmation to the low side , but it is safe to say that with open interest gaining and volume gaining each day, there is technical evidence to support this view. Spoke in the Weekly section regarding this market and its behavior regarding these two market internals (volume and open interest) and the inability of prices to work below the major support around $3.60. Not sure it is time to buy all dips but this behavior is beginning to suggest that trade perspective.

Major Support: $4.02, $3.734, $3.63, $3.584-$3.522
Minor Support: $3.82
Major Resistance: $4.187, $4.22-$4.26, $4.318, $4.423

To read The Daily Call you must be a subscriber (Current members sign in here. ) Start your subscription today.

Nice Range Yesterday

Daily Continuation

Prices gaped open on Sunday night then retraced during the morning to close both the Daily and Weekly gaps then spent the remainder of the day rebounding off the declines to close the day with a solid gain on strong volume. Now the market will decide to expand on the runs or consolidate the momentum change for a couple of days. Expect a retest of the $4.00 area and perhaps a run at yesterday’s high.

Major Support: $3.734, $3.63, $3.584-$3.522
Minor Support: $3.82
Major Resistance: $4.02, $4.127, $4.20, $4.278

To read The Daily Call you must be a subscriber (Current members sign in here. ) Start your subscription today.

Big Gap Opening

Daily Continuous

Went into some of the technical / market internals that may be starting to change as prices have remained range bound while open interest has declined in the Weekly section. Needless to say there will be damage to the technical bearish bias if the gap open on Sunday night remains in place. It would be wise to wait for confirmation of the Sunday night run today before establishing substantial positions.

Major Support: $3.734, $3.63, $3.584-$3.522
Minor Support: $3.82
Major Resistance: $4.02, $4.127, $4.20, $4.278

To read The Daily Call you must be a subscriber (Current members sign in here. ) Start your subscription today.

Range Continues — Market Internals Signalling Potential Changes

Weekly Continuous

Prices continued the range that has held the market for five weeks now. During this time period there have been some internal development in the broader market that should be noted. First is open interest – it peaked in September at 1,468,636 contracts (during the extraordinary rally), and now has started to fall during the last three weeks of December. These declines have established a year end low of 1,108,463 (the lowest total of contracts outstanding in more than four years) while prompt gas has managed to post three weekly closes (3.690, 3.731 and 3.730). The inability to extend the lows further no several attempts suggests that the gas market has absorbed an historical liquidation and is likely run out of sellers.  High levels of open interest tend to occur when everyone wants to own some gas in anticipation of higher prices, low levels when few do. 

Some food for thought –A year ago prompt gas fell from an early November high to a pre – January expiration low of 2.238 on December 28th.  Since then that low has never been tested.  This year the February’s pre – New Year’s low traded on December 30th.  Interesting things often occur around the anniversaries of previous significant events. The summer strip has turned back higher without testing its 40 – week SMA all while prompt and winter prices have faced serious selling.

To read The Daily Call you must be a subscriber (Current members sign in here. ) Start your subscription today.

Nothing New on Storage Release

Daily Continuation

No Daily yesterday as the market had not achieved anything to write about and just stayed with in the recent $.40 range. The storage release came out bearish and prices initially fell only to rebound as the morning went along. The range is what it is and should continue.

Major Support: $3.734, $3.63, $3.584-$3.522
Minor Support:
Major Resistance: $3.827, $4.02, $4.127, $4.20, $4.278

To read The Daily Call you must be a subscriber (Current members sign in here. ) Start your subscription today.

Range Continues

Daily Continuous

I wish I could make some intriguing technical assessment of the current market — but I can’t. The range is rule so play it. The range does seem to be narrowing as the market sets lower highs and higher lows (daily basis) — so perhaps that will facilitate a break out or break down.

Major Support: $3.734, $3.63, $3.584-$3.522
Minor Support:
Major Resistance: $3.827, $4.02, $4.127, $4.20, $4.278

To read The Daily Call you must be a subscriber (Current members sign in here. ) Start your subscription today.

Very Calm Opening to 2022

Daily Continuous

After discussing all the history around the “gap” events at the first of the year — the market decided to make a fool of me again by having one of the calmest openings to a new year in quite awhile. Now the price action remains in the “old” range trade and is chasing the high end of the range. Continue to work for the $.25 margins provided well within the range.

Major Support: $3.734, $3.63, $3.584-$3.522
Minor Support:
Major Resistance: $3.827, $4.02, $4.127, $4.20, $4.278

To read The Daily Call you must be a subscriber (Current members sign in here. ) Start your subscription today.

Feb Prompt Tests Support

Daily Continuation

Hope all had a great celebration entering the new year and a wish for success in the coming year. Price retraced back to support as the Feb contract took over as prompt. Before that, the expiration process continued the last ten months trend of strength. Go into some of the history of price behavior around the first of January in the Weekly section so please take a moment to review. This week and this month has a strong impact on upcoming year (Weekly). Techs have not changed — range trade and after setting a lower low last week, prices rebounded off the extension. Perhaps this behavior will continue until traders get a better indication of how the winter will leave inventories.

Major Support: $3.734, $3.63, $3.584-$3.522
Minor Support:
Major Resistance: $3.827, $4.02, $4.127, $4.20, $4.278

To read The Daily Call you must be a subscriber (Current members sign in here. ) Start your subscription today.

New Year’s History and Weekly Review

For whatever reason prompt gas has a habit of beginning (or in close proximity to the beginning) each new year with a significant event and more often than not, that event takes the form of a gap. Not sure if history will rhyme this year, but you may want to consider just a couple of factors:  1) In six of the last seven years began with a gap one way or the other, and far more important, 2) that the January high and low historically carry disproportionate importance.  For example, in 2019 the new prompt February gaped lower on the last trading day of the year.  That gap was filled and the January high traded on 01/15. That high held the market throughout the year.  The January ’19 low was not traded until the 29th…and was promptly violated on the first trading day of February.  In 2020, there was no gap but the rally in early Jan ’20 set the high for the year. Last year, the market had a gap at the end of December only to rally, rally with a gap at the new year, but prices never challenged the low from the late Dec gap. 

Again, based on all the history we have, whatever the January extremes turn out to be are going to be important to your planning for the year.  It is easy to lose sight of the importance of price levels traded early on.  Just about everyone in the market seems to have interest and more attention to short – term fluctuations but I encourage you to at least give price change during January your attention.  

To read The Daily Call you must be a subscriber (Current members sign in here. ) Start your subscription today.

2021 Comes to An End

Daily Continuous

This will be the final Daily for 2021 — I hope you enjoyed as strong a year this last year and hope to repeat it in 2022. Not much to say about prices except that it looks like the tenth consecutive month that has been well-bid into expiration. Am thinking about writing an article about an odd historical activity that occurs around the fist of the New Year — so check the web and your email on Thursday or Friday. Good Luck in 2022.

To read The Daily Call you must be a subscriber (Current members sign in here. ) Start your subscription today.