Author: Willis Bennett

Higher High then Retracement

Weekly Continuation

Prompt November traded quietly most of the week. From what proved to be the week’s low at $2.825 on Tuesday November rallied to $3.000 on Wednesday before reversing to close lower. A new high daily close followed $2.970, the highest daily continuation close since just after the June Q2 high, but with the lowest volume since 09/06. A higher close on lower volume is a form a penalty flag on any further run and not an indication that a flood of buyers is pushing price higher. Another higher high on Friday, to $3.019…squarely into the resistance, expanded the range a bit (through the first four days the total range traded was $.175 vs last week’s 15 – week average of $.281) and extended the rally from the July/August Q3 low to $1.163 (62.7% vs a ten years average of 64.1%) but another reversal followed, and test the low of the week’s range. Can not explain why but November contracts tend to rally during the first week of October.

A year ago after October was off the board November ’23 rallied smartly to a high of $3.471 on 10/09 and had become similarly overbought (the daily RSI reached 84.30 v a high of 81.13 on 09/30/24…on a weekly basis). Over the next ten trading days November ’23 came off from there to $2.861, before rallying to settle at $3.164. In ’21 November reversed from a high (on October 6th), and fell from $6.466 to $4.825 before recovering to go off the board at $6.221.

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Prices Expand the Range

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Spoke last week about the range that was developing for the Nov contract and discussed the expansion of the as well as the trend regarding highs and lows (Weekly section). That said, given the higher lows traded during July and August the long term downtrend appears to be evolving into a wide contracting trading range.

Wanted to alert folks to the premiums currently awarded to December and to January gas (their ability to hold those premiums, are going to be critical to the continuation of the current range. Given that uncertainty, Stick to the range for buying and selling discussed last week as the range has not dramatically changed in the last week.

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Good Effort But No Cigar

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The bulls tried to set up for a break out above $3.00 only to fail after the data release. Not sure how the data was interpreted as bearish to kill the gains but that fundamental information is over my pay grade. The key from my perspective is the market did not “collapse” but rather held the recent range. Take that as additional confirmation that the bias has changed. Play the suggested ranges from earlier in the week.

Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605
Minor Support : $2.62, $2.507-$2.44, $1.856,$1.89-$1.856
Major Resistance: $3.00, $3.16

Solid Range Developing

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A higher high that took prices to test the $3.00 only to fail on the first test. That outcome should not be surprising as prices will continue to test the resistance zone. The storage report may bring additional volatility this week.

Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605
Minor Support : $2.62, $2.507-$2.44, $1.856,$1.89-$1.856
Major Resistance: $3.00, $3.16

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Nothing Different

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Nothing to add or subtract from yesterday’s comments as the market traded within the same (narrower) range. Keep the same thoughts for establishing or profiting as yesterday.

Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605
Minor Support : $2.62, $2.507-$2.44, $1.856,$1.89-$1.856
Major Resistance:$3.00, $3.16

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Tight Consolidation Day

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Trying to set a base for the next step higher (should it be the result) prices paused and “consolidated” the recent gains (from expiration or what ever) and now seem to be in a consolidation process. From here, would suggest buying dips on the declines and selling over the $3.10 zone.

Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605
Minor Support : $2.507-$2.44, $1.856,$1.89-$1.856
Major Resistance:$2.618, $3.00, $3.16

Bias Change But Hang Tight

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Well that was different. October rallied to trade the high of its tenure as prompt on the same day it went to settlement, the first expiration month this year to do so (actually, the first month since July ’23). As discussed previously, eight expiring monthly contracts have traded their low during the days of the expiration process. While October faded $.105 from its expiration day high, $2.585 was the highest settlement value since July settled at $2.628 (after falling from the June Q2 high at $3.159), was $.151 higher than last week’s close and $.655 higher than September.

The new prompt November contract was awarded $.168 premium over October settlement (vs $.285 at last week’s close) began by narrowing the “expiration” gap to $.030 ($2.690 – $2.720), but quickly followed through to the upside. On Friday, November extended the rally to trade as high as $2.928 and was bid to a slightly higher high in aftermarket trading ($2.932) much like October was last week. Although Friday’s volume was less than either Wednesday or Thursday, the new prompt traded a technically positive “outside” day reversal higher and closed at the highest price since June 18th (July 8th for the November contract).

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New Bias Needs to Create New Range

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The market seems to be changing it’s bias after the expiration last week. Would treat this change with caution until there is solid confirmation of the next and new range.

Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605
Minor Support :$2.62, $2.507-$2.44, $1.856,$1.89-$1.856
Major Resistance:$3.00, $3.16

Jury Is Out

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While prices were up and down during yesterday’s expiration, I am going to state that the expiration process was well supported, thereby breaking the trend of the previous expiration’s of 2024 which were all well offered during the process. What does this mean?—The bearish bias (all through this year) is starting to take some hits. The first target is the gap remaining from the premium awarded the Nov contract (even though some of that gap was closed during yesterday’s decline). This will be the first test of a confirmation of a bullish bias change.

Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605
Minor Support : $2.507-$2.44, $1.856,$1.89-$1.856
Major Resistance:$2.618, $3.00, $3.16

November Maintains $.20 Premium

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Today is expiration and the market has not shown a weakness yet, but the verdict is not yet defined. I continue to reflect on what was identified from the trends of ’24 and will expect some weakness.

Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605
Minor Support : $1.856,$1.89-$1.856
Major Resistance:$2.44-$2.502, $2.618, $3.00, $3.16

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