Author: Willis Bennett

Breakout Yes — Volatility No

Daily Continuous

Was expecting more volatility (perhaps light short covering) on a break above $2.72– little occurred. The total volume was slightly less than last Friday — indicating continued complacency in the nat gas world. Keep in mind that according to the CFTC data the large chunk of short positions occurred as prices declined off of the $3.00 area in Feb, so perhaps the folks aren’t squirming yet. Would look to play this little rally for a day or two more, but expect the market to correct a little as it has a series of higher daily closes.

Support: $2.52, $2.422-$2.414, $2.373–$2.356,$2.255-$2.176
Minor Support: $2.694, $2.483, $2.162
Major Resistance: $2.713-$2.72, $2.74-$2.789, $2.89, $2.98-$3.05,
Minor Resistance:$2.806

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Time to Break Above?

Daily Continuous

Once again the market is making a subtle alert to its longer term intentions by closing near the highs last week and opening stronger on Sunday night. Call me a cynic, but I will wait for confirmation today with a close above this key area that has held resistance for several weeks. Not to say it may be a break out as discussed in the Weekly area on the website — but on a daily basis — need some proof of strength.

Support: $2.422-$2.414, $2.373–$2.356,$2.255-$2.176
Minor Support: $2.483, $2.162
Major Resistance: $2.713-$2.72, $2.74-$2.789, $2.89, $2.98-$3.05,
Minor Resistance:$2.806

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Why Not Gas?

Weekly Continuous

As many of you know already– commodity markets have been on a tear for 2021, many since last July. Copper, gold (though not of late), corn, soybeans the list goes on. Many pundits have referred to as a super-cycle in the commodity trade. Yet with all this bullishness, gas has not been able to hold onto the gains made late last year and have constantly retraced. Grant you prices are higher this year but it does not seem as strong as most of the other commodities. This website has discussed several times last fall and winter the “bias change” that was occurring in the gas market and with all the discussion about the super-cycle, it is time to update the charts.

Weekly Continuations with Highs and Lows

Notice in the charts, the multi-year low late last June (interesting timing with the commencement of the other commodity rallies), the market has set a series of higher highs and higher lows. The one exception was this February when prices could not exceed the previous high from Nov by a few pennies. Other than that– the gas market has maintained a significant premium to the June ’20 lows. This activity may represent the development of a more bullish environment for gas in 2021.

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Almost

Daily Continuous

The volatility after the release caught some shorts off-guard but prices could not pierce the resistance of recent movements at $2.70. Is there enough to garner a break or not. Also that area as a great area for shorts with some tight stops just above. Play as you see fit.

Support: $2.422-$2.414, $2.373–$2.356,$2.255-$2.176
Minor Support: $2.483, $2.162
Major Resistance: $2.713-$2.72, $2.74-$2.789, $2.89, $2.98-$3.05,
Minor Resistance:$2.806

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Thrust Higher Only to End Lower

Daily Continuous

Prices opened and rocked higher only to give up all the gains by the day’s end. Hoping some volatility and directional bias occurs on the storage release today but not holding my breath. Natural gas is likely to stay in the range from $2.80-$2.40 for the next month or so– I would like to see a rally up to $2.80 in order to potentially flush some shorts.

Support: $2.422-$2.414, $2.373–$2.356,$2.255-$2.176
Minor Support: $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.89, $2.98-$3.05,
Minor Resistance:$2.806

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Is This a Break Out?

Daily Continuous

After complaining about the lack of directional bias in trade of late, the price action yesterday provided a slight directional bias. Trade still remains within the range and this move can easily be defined as a test of the range resistance. Prices will need to break (closing basis) above resistance to formulate the next move.

Support: $2.422-$2.414, $2.373–$2.356,$2.255-$2.176
Minor Support: $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.89, $2.98-$3.05,
Minor Resistance:$2.806

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Nothing Yet

Daily Continuous

Each day I come in and open my charts hoping to find some directional bias to the market– maybe a break out or break down — don’t care but what is the genre — another tight range trade day with no volatility. The problem is exacerbated because crude is behaving similarly– those are the two favorite commodities for me to trade. Guess corn will be calling.

Support: $2.422-$2.414, $2.373–$2.356,$2.255-$2.176
Minor Support: $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.89, $2.98-$3.05,
Minor Resistance:$2.806

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Consolidation Brings Volatility Weakness

Weekly Continuous

Spoke in Good Friday analysis about the declining volatility that the current market had been maintaining. Nothing changed last week as the prices remained in a tight range environment, seemingly going nowhere. Maintaining above the 200 day moving average but closing just below the 40 Week Moving Average, prices seem to want to test the low end of the current range $2.45-$2.42 and very well may but the key is what happens upon that test — a break below will likely bring the lows from last Dec into play a test and failure will send a much different signal.

Going back to the volatility and lack of it in the current market and the potential impacts for future prices. Look at the chart below, it represents the continuous price movement (upper pane) and the daily range for prices over the last 14 days (lower pane):

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Range Range Range

Daily Continuous

Quiet trade continues to haunt the nat gas market with last week’s low not really seriously challenging the mid-term support levels before rebounding. Early trade last night shows the market stronger. Don’t put a lot of money chasing Sunday night rallies. Went into some of the longer term aspects of the reduced volatility and market impact in the Weekly section, suffice to say that I am not convinced of long term additional significant declines considering the current status of the market (per Weekly section). Play the range.

Support: $2.422-$2.414, $2.373–$2.356,$2.255-$2.176
Minor Support: $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.89, $2.98-$3.05,
Minor Resistance:$2.806

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Storage Report Does Nothing

Daily Continuous

Interesting that the volume rose a little yesterday as the prices held firm on the storage release that was well within expectations. This market has been consolidating for nearly two months (though within different ranges) with open interest very close (within 4,000 contracts) to where it was on March 8th. Volume has had some good days and some terrible days and yesterday’s volume was the third largest since March 8th. What to do — patience and buy the dips with tight stops as I mentioned earlier in the week. It is not conclusive that this market has the commitment to do diddly.

Support: $2.422-$2.414, $2.373–$2.356,$2.255-$2.176
Minor Support: $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.89, $2.98-$3.05,
Minor Resistance:$2.806

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