Author: Willis Bennett

Likely To Be Important Week for Bias

Weekly Continuous

Rather than my expected recovery (prompt gas typically rallies from a late July/early August low) September continued to find substantial selling between $3.100 and $3.150 (the highs of the last seven trading days have been within that zone and with the exception of a downside reversal day on 7/30 ($3.186) since 07/24. Fading from that band of resistance September traded through the calendar July low ( not particularly unusual, it has now done so in 14 of the last 20 years), but then posted the lowest daily closing price since last November ($2.823, 11/15).

The recovery from Monday’s low of $2.895 (the lowest low since prompt May was about to go to settlement) left the first suggestion of a momentum divergence that we’ve seen during the decline from the June Q2 high. A reversal from the high of that recovery (08/07, $3.148) suggests that September has not yet developed the sponsorship for the expected seasonal “correction”.

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Rebound Off of Support

Daily Continuous

Spoke yesterday regarding the break down in prices and whether it was going to be built on with additional declines. Prices started lower, but then had a solid rebound. Next issue will be the storage release today and will the gains remain.

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support :
Major Resistance:$3.167, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461, $4.501

Fake to the Down Side

Daily Continuation

Did not publish last night as I was wondering if the 1st close below $3.00 was indicative of price bias in the immediate term or a “one-off”. The answer came in trade yesterday which held support and then rallied. The game is not over for an extension of the gains, but rather a rebound. What was more interesting was the gains in some of the winter months as the Sept prompt rallied. Sept, as prompt may have some volatility, but some of the winter contracts may preform better from the long side as we head into fall and winter. The downside needs to see additional momentum to the bias and not run out of steam (keep an eye on open interest).

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support : $3.30-$3.26
Major Resistance:$3.25-$3.31,$3.39, $3.62, $4.168, $4.461, $4.501

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A Market Needing Stimulus

Weekly Continuation

August extended its decline, trading just through $3 before going off the board at $3.081, the lowest contract month settlement since November ’24 at $2.437. To close out calendar July, new prompt September undercut the pre-expiration low by a penny before reversing higher. On a continuation basis prompt gas closed lower for the fifth time over the six weeks. While the open and close numbers are not exact, prompt gas ended the week near where it began when trading resumed ($3.083 v $3.093). That’s close to but not a textbook doji, but it is close. This pattern can suggest some measure of exhaustion for the downtrend that has now extended $1.176 or 28.4% from the 06/20 failed test of the April high. While the downtrend may be temporarily exhausted seasonal pressure almost certainly isn’t.

An early August rally is typical of September’s tenure as prompt followed by a fade into expiration. In ’24 September peaked on 08/15 at $2.301 after rallying from a post – August expiration low of $1.882 then retreated to exactly test the July low of $1.856 (hard to believe that the July and August lows were identical) before recovering to go off the board at $1.930. That rare, perfect “double bottom” has never been retested. Do not expect history to repeat itself but a similar pattern with different levels may occur.

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Light Sunday Trade Wants to Break $3.00

Daily Continuous

Went into expectations of the September contract in the early Aug period in the Weekly Section. Prices opened softer on Sunday night suggesting additional weakness during the trade day. Clearly at major support so I would not expect a major break down, rather an other test of support.

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support :
Major Resistance:$3.25-$3.31,$3.39, $3.62, $4.168, $4.461, $4.501

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New Prompt Same Range–Maybe Lower

Daily Continuous

September came out as prompt and immediately fell to the lows established by the August prompt in the last week. See no compelling reason to catch this falling knife rather for length or not convinced that the declines will be compelling. Sometimes the sidelines are inviting.

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support : $3.30-$3.26
Major Resistance:$3.25-$3.31,$3.39, $3.62, $4.168, $4.461, $4.501

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New Prompt — New Range?

Daily Continuous

Expiration brought on a slight rally– we will have to wait for any follow through. We are at some lows maybe look to the winter months for long positions or prompt months for short postitions.

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support : $3.30-$3.26
Major Resistance:$3.25-$3.31,$3.39, $3.62, $4.168, $4.461, $4.501

Weakness Into Expiration Is the Recent Trend

Daily Continuous

Expect prompt August to be offered lower but likely recover into expiration as most prompts this year have…the last three settlements were $3.170, $3.204 and $3.261. Expect prompt gas to remain rangebound as it takes over as prompt and during expiration.

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support : $3.30-$3.26
Major Resistance:$3.25-$3.31,$3.39, $3.62, $4.168, $4.461, $4.501

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Going To Keep Testing Lows

Weekly Continuous

The weight of the seasonal pressure that has been discussed and warned about since before the rally to the June Q2 high, fell on soon to expire August. A year ago, the seasonal descent was more orderly after the June Q2 ’24 high (week ending 06/14) prompt gas declined for six of seven weeks (falling from $3.159 to $1.856, or 41.2%). At the time the weekly ATR was .324. By the time a rally began to gain momentum, following an August test of the July low, the ATR had fallen to .268.

This is another example in natural gas that history does not repeat itself, but some times it rhymes. Since the June ’25 Q2 high (week ending 06/20, a few days after the anniversary of the high) the decline has been far more erratic. Just last week August closed at its highs gaining $.125(and was well – bid in the aftermarket. Volatility, still elevated by historic standards, is $.466/dt/week (+/- 40% higher).

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Rebound Off of Support Test

Daily Continuous

The declines neglected challenging the key support area and on the storage release rallied over $.10 but gave the gains up during the remaining trade. Still believe that any declines will be rejected at the support lows — that said would not load up on length.

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support $3.30-$3.26
Major Resistance:$3.16-$3.25, $3.43, $4.168, $4.461, $4.501