Author: Willis Bennett

Trade (Daily Basis) Defines Little

Daily Continuous

Prices opened with a gap last week and tried to close the gap failed. From those declines, they managed to trade in a range higher for the remainder of the week. Prices are opening softer in the Sunday trade and seem to want to closed the gap from last week. That action would take prices down to $2.547. Went into some mid-range analysis in the Weekly section, which I would recommend reading, but the market is trading in a range with the short term looking bearish but the longer term bias remains a more positive perspective.

Support: $2.373, $2.255-$2.176
Minor Support:$2.547, $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.98-$3.05,
Minor Resistance: $2.806

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2021 Commences With Gap

Weekly Close

The year’s trade commenced with a small gap between 2.547 and 2.626, and it appeared it would be filled when February retreated from the 20 Week SMA and narrowed the to 2.566. Surprisingly, price declines stop and closed not far off its low and remained open through the weekly close.  February regained the continuous 20 week SMA, and spent the remainder of the week testing the continuation 50 day SMA, each day trading ended higher than it began suggesting increasing sponsorship. 

Weekly Continuous with Volume

The week’s gain were powered by significantly higher volume, highest in a months (see chart above). That said, the comparison should be viewed with a skeptical eye given the modest volume of the last two holiday shortened weeks.

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Quiet For a Storage Report

Daily Continuation

An inside day yesterday as prices created no new high and no extension downward even with the storage report release. I wish the techs would tell more but things haven’t changed for the last few weeks when I discussed (December Weekly) that price over the long term (see Monthly or Weekly charts) remains with a slight bullish environment but is susceptible to declines testing support. Current price action seems to be using the 50 day SMA as near term resistance. Key areas for support is last months gap open low at $2.238 and resistance has been defined at the 50 day SMA up to $2.79. Need to be patient here as bias needs to be confirmed.

Support: $2.373, $2.255-$2.176
Minor Support:$2.547, $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.98-$3.05,
Minor Resistance: $2.806

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Consolidation ?

Daily Continuation

Prices continued the mild strength as a higher high occurred with a higher low on the day. Don’t read a lot into that observation as it seems that the market continues to look like a consolidation pattern, waiting for the next directional bias. From the technical perspective, nothing has been defined nor indicated.

Support: $2.373, $2.255-$2.176
Minor Support:$2.547, $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.98-$3.05,
Minor Resistance: $2.806

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Rumors

Daily Continuous

Not a week goes bye where I don’t hear a rumor about the busts in the weather models (both European and American models)– I just don’t know how you fundamental folks deal with it. To me, the market is consolidating the gains from the gap open and should retest the low side of the gap. Does it break down, or does it rebound — anyone’s guess– but the results will be important for near term direction.

Support: $2.373, $2.255-$2.176
Minor Support:$2.547, $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.98-$3.05,
Minor Resistance: $2.806

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Strong Start- Weak Close

Daily Continuous

The market is confusing my analytical mind set on the fundamental data points. Clients tell me that the fundamental data (weather forecasts and HDD’s below normal) is rather bearish– yet the market gaps up and maintains the gap during the trade day. Confusion reigns. I do see that the Dutch TTF contract seems to be on a tear and has been for last couple of weeks. Is the market implying that there is some trading between the two markets — (LNG relevant)– this could be interesting to watch through the month as I explained the potential impact from the Feb contract during January, for the rest of the year.

Support: $2.373, $2.255-$2.176
Minor Support:$2.547, $2.483, $2.162
Major Resistance: $2.74-$2.789, $2.98-$3.05,
Minor Resistance: $2.806

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Strong Close — Gap Up Open

Daily Continuation

Welcome to the New Year and best wishes to all of you fine readers. It is no surprise to see a gap open on the contract after the New Years holiday (see the Weekly section) and after last week’s reversal of a low (likely going to hold near term declines) at $2.238, it not surprising to see the gap directionally up. Now what happens to the contract over the next week may have a longer term impact on the year.

Support: $2.373, $2.255-$2.176
Minor Support: $2.162
Major Resistance: $2.74-$2.789, $2.98-$3.05,
Minor Resistance:

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Early January Trade Has History

Weekly Continuation

That was a Holiday week as prices gaped open ($.26) lower only to spend the remaining days erasing that loss and ending the week $.015 higher. As expected all of this action occurred on below average daily and weekly volume.

January has had a strong history since ’92 of starting a month with a gap up or down. Sometimes (like last week) the gaps happen before during or after the holiday period. After what appeared to be a devastating gap lower to a three month low, prompt gas managed to trade a second straight reversal week and finish higher. It should also be recalled the historically importance (compared to other calendar months) is attached to the January extremes. For example, in 16 of 30 years the Q1 high has traded during January, on the other hand –14 times the January low has been the Q1 low. For some unknown reason, January trade has significant impact for prices during the year.

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Diseased Animal Bounce?

Daily Continuous

A solid bounce off of the declines from Monday, but don’t bet your lunch money on it. Skepticism is generated from the seasonal light trade, the gaining in the overseas LNG market, and the fact that the run is contrary to the weather forecasts for the coming two weeks. Enjoy the new year and I will be back with a Daily on Jan 4th.

Support: $2.373, $2.255-$2.176
Minor Support: $2.162
Major Resistance: $2.55, $2.74-$2.789, $2.98-$3.05,
Minor Resistance: $2.515

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Break Down Into Gap

Daily Continuous

Prices gaped lower on the open Sunday night and traded in a tight range until the end of the day which provided a slight bounce. Expiration is upon us and I am of the belief that the low of the expiration has been established. Even with this dramatic decline, the long term bias analysis (discussed three weeks ago) remains in place. That said, all the near term charts have gaps in them which the market will need to define further. Trade carefully in the coming two days.

Support: $2.373, $2.255-$2.176
Minor Support: $2.162
Major Resistance: $2.55, $2.74-$2.789, $2.98-$3.05,
Minor Resistance: $2.515

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