Author: Willis Bennett

Quiet Expiration as Fundamentals Offset

Daily Continuation

Flipped the price chart over to the Oct contract for the continuous chart. The declines that were expected are occurring but would expect more to close the premium between the Oct and Sept contracts. Prices will all depend on the situation / positions during the expiration process. The fundamental trade will continue to struggle between the ending inventory levels and the current storage levels (projected forward) that is why I will let the fundamental folks define the technical behavior.

Major Support: $2.162, $2.089-$2.055, $2.029-$1.937, $1.86, $1.527,
Minor Support: $$2.499-$2.43, 2.377, $2.255, $2.102, $1.975, $1.719
Major Resistance:$2.51-$2.54, $2.588, $2.709

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Snoozing, Likely to Change

Daily Continuous

Would not expect the quiet day trade of yesterday to continue through expiration. We have options expiration today and then the contract (storage) on Thursday — love it when that happens. Would expect $2.50-$2.60 in play for expiring calls — the put contracts may not get exciting until $2.25. Go back to what I mentioned in the Weekly that the seasonal weakness (week either side of Labor Day) is one of the weakest of the year and if prices don’t go down during this period they are going up.

Major Support: $2.162, $2.089-$2.055, $2.029-$1.937, $1.86, $1.527,
Minor Support: $$2.499-$2.43, 2.377, $2.255, $2.102, $1.975, $1.719
Major Resistance:$2.51-$2.54, $2.588, $2.709

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Prices Approaching Key Period

Daily Continuous

That is why I maintain hedges as prices ignored what the technical data suggested and went opposite, reversing off of early declines to finish higher. Now we are looking at a key struggle, as the market has a influence of The expectation is that prices should weaken this week — but if they don’t I think the weekly section sums it up well.

Major Support: $2.162, $2.089-$2.055, $2.029-$1.937, $1.86, $1.527,
Minor Support: $2.377, $2.255, $2.102, $1.975, $1.719
Major Resistance:$2.43-$2.499

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Impressive Close

Weekly Continuous

Suggested in the Daily last Friday, that against the technical instincts that the market showed, it may rally against the consolidation for prices, similar to the week prior and decline. Sure enough, prices started weaker, per the expectations, only to take off on a nice outside daily reversal pattern, finishing near the highs of the day.

With that said, it should be noted that the rally has taken prices near a zone, commencing at $2.50 up to $2.60 that has held the market consistently over the last few years. During last year’s run to the Q4 high there have been only four closes above it, all during the run in Nov ’19.

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Now We’re Talking

Daily Continuous

So we discussed yesterday that it looked like the market need to take a breath– hey it did. Last week, at this time, the suggestion was made that perhaps more consolidation should occur– what happen– the market trashed my thoughts with a big move higher. I will submit the same analysis as last Friday, that the move in gas need to continue to test support zones from which to build a base to send prices higher. However, this week there was a slight hedge with some calls– just in case kids want to play.

Major Support: $2.162, $2.089-$2.055, $2.029-$1.937, $1.86, $1.527,
Minor Support: $2.377, $2.255, $2.102, $1.975, $1.719
Major Resistance:$2.43-$2.499

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Now What?

Daily Continuous

So now what — market is a little over extended but could continue higher, looks like it needs a brief rest back to the low $2.30’s or just below. Perhaps it rallies off the number to the major resistance. The market bias has change over the last 3 weeks and buying the dips has become a challenge in itself, as prices have not conformed to technical support zones.

Major Support: $2.162, $2.089-$2.055, $2.029-$1.937, $1.86, $1.527,
Minor Support: $2.397-$2.377, $2.255, $2.102, $1.975, $1.719
Major Resistance:$2.43-$2.499
Minor Resistance:

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Continued Extension

Daily Continuous

Not sure what information is continuing to feed this bull, but it has to be respected for now. Yes, the technical side is approaching over bought status, but in these situations usually run on there own and technical indicators be damned.. Have talked about support areas over the last couple of days- so will not repeat (just in case the market wants to retreat).

Major Support: $2.162, $2.089-$2.055, $2.029-$1.937, $1.86, $1.527,
Minor Support: $2.397-$2.377, $2.255, $2.102, $1.975, $1.719
Major Resistance:$2.43-$2.499
Minor Resistance:

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Rather Subdued Monday

Daily Continuous

After the small explosion in prices last Friday, it was not surprising to watch consolidation yesterday. Starting to hear questions about this rally in the face of the storage surplus which may be an indication of the struggle yet to come as we head into the late Q3. In the mean time, play the mini-ranges that are developing, now in the $2.30’s, and likely to head into the high teens during the seasonal weakness.

Major Support: $2.162, $2.089-$2.055, $2.029-$1.937, $1.86, $1.527,
Minor Support: $2.255, $2.102, $1.975, $1.719
Major Resistance:$2.377-$2.397,$2.43-$2.499
Minor Resistance:

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Friday’s Trade Speaks Loudly

Daily Continuous

Was not expecting a break out upward on a Friday– but when prices bounced off the 40 week SMA in the Sept contract the party started. It should be expected that with the reduction of short positions and the hurt feeling associated with the rally event — dips will be bought. Key areas for the dips are $2.28, $2.16 and if it gets back there, $2.055.

Major Support: $2.162, $2.089-$2.055, $2.029-$1.937, $1.86, $1.527,
Minor Support: $2.255, $2.102, $1.975, $1.719
Major Resistance:$2.377-$2.397,$2.43-$2.499
Minor Resistance:

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Momentum Builds

Weekly Continuous

 Following the largest one week gain since the end of the run to the November ’18 Q4 high, the September contract extended the gains another .118/d, to close the week at the highest weekly close since 11/22/19. Expecting a building resistance just above $2.25 and the likelihood of correction back to substantial support, never occurred but buying commencing at the 40 – week SMA of September gas (followed by the hedge funds) ended the potential for lower offers.  The price rebound during the week extended into the close, with higher volume and gains in open interest and a close above the historically important January high is an indication that the September contract will continue to push further before expiration.  The August, September, October, November ’19, April and May ’20 highs of September gas all traded between 2.410 and 2.499 which could be expected as the destination for the recent gains.

Monthly Continuous

While negative price action seems remote, prices will be testing the zone from $2.28-$2.25 and the area around $2.16 before expiration in all likelihood. Testing those areas are not as important as what happens to prices while testing that area.

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