Author: Willis Bennett

Where We Going

Daily Continuous

During 2024 the gas market has left several “expiration” gaps. “Expiration” gaps are not uncommon. What is uncommon is if/when they go unfilled for any significant length of time. There was one back on 12/28 after January went off the board premium to February. That gap was filled during February’s first day as prompt. The next one was a big one and remains open between $2.168 and $2.441. March failed after narrowing the gap about a nickel (signalling an excellent indication that much lower prices were in store). That the gap will likely be filled, but not right now. Since the gap that followed February expiration, there have been two others and now likely a third. The first two (after March and April expiration’s) were filled in the following monthly trade. On Monday, if June opens unchanged there will be a $.281/dt daily continuation expiration gap (between $1.628 and $1.909)–and a weekly continuation expiration gap between $1.848 and $1.907. Due to the timing of contract expiration’s there hasn’t been one of those for a while but a weekly of anything is more significant than daily. Expect both will be filled sooner rather than later.

Major Support:, $1.595, $1.52-$1.511, $1.481, $1.312
Minor Support :
Major Resistance: $1.94-$1.967, $2.00, $3.00, $3.16, $3.48, $3.536, 3.59,

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Expiration Day

Daily Continuous

Here we are at expiration and the variances between prompt May and the rest of the market have become pronounced. My suggestion remains the same from yesterday.

Major Support:, $1.595, $1.52-$1.511, $1.481, $1.312
Minor Support :
Major Resistance: $1.94-$1.967, $2.00, $3.00, $3.16, $3.48, $3.536, 3.59,

Expiring May Gets Crushed

Daily Continuous

May got hammered while the rest of the summer was weaker but not to the extent of May’s declines. Now becomes the silly expiration process — I may have been wrong in not seeing the May expiration testing the lows of the previous two month’s expiration. Clearly, its in range now after yesterday’s declines. As you all know I do not venture with position going into option expiration nor contract expiration. My goal in this process is to establish good positions to sell in the options market.

Major Support:, $1.595, $1.52-$1.511, $1.481, $1.312
Minor Support :
Major Resistance: $1.94-$1.967, $2.00, $3.00, $3.16, $3.48, $3.536, 3.59,

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Still Hanging at Resistance

Daily Continuous

Prices closed the day at the high and key near term resistance area. Now what? Does it break out above (expect serious short covering) or just return to the low end of the recent range at $1.60). Lets watch with selling premium at higher levels.

Major Support:, $1.595, $1.52-$1.511, $1.481, $1.312
Minor Support :
Major Resistance: $1.94-$1.967, $2.00, $3.00, $3.16, $3.48, $3.536, 3.59,

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Solid Run to Resistance

Daily Continuous

Prices are now challenging the high end of the resistance for the May contract– likely stating that the action is headed to extend lower before expiration. Doubt the declines will match those of the March and April contracts capitulation but the trade has continued to be range trade so a challenge to resistance will be met with selling and a decline back into the range.

Major Support:, $1.595, $1.52-$1.511, $1.481, $1.312
Minor Support :
Major Resistance: $1.94-$1.967, $2.00, $3.00, $3.16, $3.48, $3.536, 3.59,

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Range Events Create Limited Analysis Insight

Weekly Continuous

Previously, the low of May’s tenure was $1.686 ( inside the targeted zone of support, on its second day as prompt). This past week May finally took a couple of shots at closing the “expiration” gap left open on 03/27, neither quite made it. On the 16th May traded to $1.649, on the 17th to $1.660 which leaves a remnant of the gap between $1.647 and $1.649 still unfilled. Perhaps close is good enough natural gas does not like a vacuum, do not be surprised if May completes the task during its last week.

Contrary to that expectation is May’s reaction when it came close -the first time it ripped higher, trading to $1.802 in less than an hour. During the hour before May printed the week’s low 14,008 contracts traded, during the hour that low and reversal traded 50,239 (which makes me think that more than a few participants were paying attention to that gap and scrambling to get out of positions). Since May faded into the close setting up another test (total open interest fell for the first time in five days) it could only have been short covering, but $.153 in less than an hour serves as a good example of how quickly prices can disappear in a thin market.

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Some Evidence Developing

Daily Continuous

Discuss some of the elements that the market is starting to advertise as to future in the Weekly / Long term section, but most are light at this point so the likely hood of any break out is limited. May prompt has five days left and expect a complete closure of the gap from the April expiration but am not convinced of the expiration weakness that the last two expiration’s experienced. Volatility will return to the market but unlikely until power demand and expectations starts to rear it’s head.

Major Support:, $1.595, $1.52-$1.511, $1.481, $1.312
Minor Support :
Major Resistance: $1.94-$1.967, $2.00, $3.00, $3.16, $3.48, $3.536, 3.59,

Not Much For Now

Daily Continuous

Boredom abounds as I can’t even get my fundamental folks to lead into a discussion– here we sit going into yet another storage release from just about the same price (give or take a dime from $1.70)– not even going to waste the time to count how many but it has been a few Thursdays. Well load up on the premium and watch the paint dry.

Major Support:, $1.595, $1.52-$1.511, $1.481, $1.312
Minor Support :
Major Resistance: $1.94-$1.967, $2.00, $3.00, $3.16, $3.48, $3.536, 3.59,

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Interesting Trade Day

Daily Continuous

I must admit that I try too hard sometimes to read into trade bias during the day and yesterday was a a great example. The morning trade closed the expiration gap from the end of March and my belief was .. lets go test the lows… instead prices rallied back and were up on the day before collapsing back under $1.70 at the time the stock market closed. Got no clue on how to explain that movement nor the timing.

Major Support:, $1.595, $1.52-$1.511, $1.481, $1.312
Minor Support :
Major Resistance: $1.94-$1.967, $2.00, $3.00, $3.16, $3.48, $3.536, 3.59,

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Testing Calendar Low

Daily Continuous

We might be finding some excitement as the prompt May contract is challenging the calendar low for the month. A breakdown may take prices to the support from the previous months expiration lows. It may also close a small gap in the Daily trade. Finally, something to discuss– no bias adjustment in this move.

Major Support:, $1.595, $1.52-$1.511, $1.481, $1.312
Minor Support :
Major Resistance: $1.94-$1.967, $2.00, $3.00, $3.16, $3.48, $3.536, 3.59,

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