Author: Willis Bennett

Nine for Nine

Weekly Continuation

For the ninth consecutive expiration, the contract rallied during the process. I have no clue as to why, but in this case the rally in the expiring Dec contract price exceeded the Jan contract periodically during the”take-off”. December’s rally was the first monthly settlement value lower than the previous month since April settled below March– this action confirms the loss of upside momentum during calendar November and suggests a period of consolidation.

The contracts in the Q2 months and months more distantly deferred broke out to and closed at new highs. A week ago, the technical evidence indicated increasing sponsorship for the deferred gas. I mentioned last week that it was likely that the December would rally into expiration, however more restrained than the November contract. Failure to rally (continue the historical trend) would have been an indication that the character of the uptrend had changed. December’s rally confirms the bias remains in place.

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

Sunday Opens with Collapse

Daily Continuous

Expanded on the expiration in the Weekly section and expectations for the coming period, many of which are becoming accurate in the early trade on Sunday night. Similar to the major declines last month– the move should test the low end of the range (established and confirmed last month) around the $4.70 area. This is the key area discussed a couple of weeks ago highlighting the trend of higher highs and higher lows since fall ’20 that has helped define the recent bullish bias to trend.

Major Support: $4.825, $4.728-$4.70, $4.61, $4.537,$4.375,
Minor Support: $4.66
Major Resistance: $5.148-$5.175, $5.339-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493

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

The Rebound Off of Support

Daily Continuation

Let me take this opportunity to wish all a Happy Thanksgiving Holiday as prices continue to maintain the range with some slight extension early in the day or after hours with Globex platform. Would expect this range action to continue during the expiration but volatility may be exaggerated with light trade over the next couple of days.

Major Support: $4.825, $4.728-$4.70, $4.61, $4.537,$4.375,
Minor Support: $4.66
Major Resistance: $5.148-$5.175, $5.339-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493

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

Support Breaks at the Open

Daily Continuous

When the market opened on Sunday night there was a “mild” correction downward — but when the market opened in the morning, prices just collapsed and went below the previous low from late September. From there, prices rebounded and closed the day back within the recent range. The bias that I have been commenting on since fall ’20 does not die with a break below the $4.70 area but the trend may get adjusted with a daily close below that area. The current trade has a slight positive bias, but since the break below $5.20 the trade is neutral until further definition. This week remains with potential volatility significant– there are two counter forces –weather forecasts vs trends of the last eight months showing strength on expiration.

Major Support: $4.825, $4.728-$4.70, $4.61, $4.537,$4.375,
Minor Support: $4.66
Major Resistance: $5.148-$5.175, $5.339-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493

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

Strong Close to the Week — Weakness on Sunday

Daily Continuation

Prices tested major support last week and failed to break below, which will bring an interesting flavor to trade this week. On Friday, there was price strength at the close of Globex trade, and early trade on Sunday has eliminated those gains. Where does it go from here … would expect declines today (obviously) but not sure the recent trend of the last eight months will be broken (discussed further on the Weekly section). There are some potential issues this week with trading times and the days so tread carefully during the week.

Major Support: $4.88-$4.825, $4.728-$4.70, $4.61, $4.537,$4.375,
Minor Support: $4.66
Major Resistance: $5.148-$5.175, $5.339-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493

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

Critical Support Holds Again

Weekly Continuation

The lows of the last two weeks and the October low, have been within a band of support between the November and December ’18 highs that prompt gas broke out through during September on the way to the October high (Q4 high to date). Multiple attempts to penetrate that well – defined support tends to confirm (especially after the downside momentum generated by last week’s decline) to that breakout level’s significance.

Eight straight contract months have rallied into expiration. The Friday before November went off the board it closed at $5.280. Three trading days later it settled at $6.202. I have no knowledge of why that trend of the last 8 months shouldn’t continue, but I doubt it will have the same action of the expiration of last month. Expect the low end of the range to be tested during the week, but also be prepared for the trend consistent rally.

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

Support Continues to Hold

Daily Continuous

I guess the area between $4.80-$4.70 is going to be tough to break, so far. Yesterday or today may be the best opportunities for a break to happen. The market has shown the propensity to rally into expiration, be aware that November was the eighth straight contract month to rally into expiration…and that the last five of those have traded their pre – expiration lows between the 16th and 21st before a significant gain. Next week’s expiration will be interesting as the Holiday provides some odd situations as the market will expire on next Friday in a shortened trade day.

Major Support: $4.88-$4.825, $4.728-$4.70, $4.61, $4.537,$4.375,
Minor Support: $4.66
Major Resistance: $5.148-$5.175, $5.339-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493

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

Will Prices Succeed on This Test

Daily Continuous

Mentioned in a previous blog that if price action does not take advantage of the previous decline– it was go to miss a great opportunity. The same can be said for the current declines. Technical indicators are confirming the market is “consolidating” or range trading for the last couple of weeks with open interest gaining last week with volume declining from last week and lower day to day as compared to last week. The momentum indicators are calm — confirming the consolidation.

Major Support: $4.88-$4.825, $4.728-$4.70, $4.61, $4.537,$4.375,
Minor Support: $4.66
Major Resistance: $5.148-$5.175, $5.339-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493

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

The Beat Goes On

Daily Continuation

I have to get used to the volatility now in the market — for the last couple of years ten to fifteen cent moves were a big thing — now we trade in a world of twenty and thirty cent moves. Reminds me of the days 5 to 20 years ago when volatility was every day (so it seems in my memory). I digress- but prices did challenge the $5.17 area and went on up to the next mini range before giving it all up towards the end of the trade day. Now What? You guessed it — more volatility and range trading like through the end of Dec contract. Remember the history of the last few months trading on strength during expiration. Too early to tell for Dec but the schedule is rather bizarre next week with the Holiday.

Major Support: $4.88-$4.825, $4.728-$4.70, $4.61, $4.537,$4.375,
Minor Support: $4.66
Major Resistance: $5.148-$5.175, $5.339-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493

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

Prices Pick Up the Run

Daily Continuous

Bouncing off of support lows from last summer, prices moved upward in an orderly way. Just as I expected the market to test the lows — I expect the run to move prices back up to $5.175 and test some of the areas of resistance. Time and weather forecasts will identify how far the rally runs. From a trade perspective, I don’t follow the fundamental data points, I will be trading based upon the range and the mini-ranges that develop.

Major Support: $4.88-$4.825, $4.728-$4.70, $4.61, $4.537,$4.375,
Minor Support: $4.66
Major Resistance:$5.028, $5.076, $5.148-$5.175, $5.339-$5.40, $5.64, $5.964, $5.996,$6.177, $6.24-$6.493

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