Author: Willis Bennett

Are Cracks Developing in Bear Cave

Daily Continuous

Not saying that the bear market is coming to a new definition but some of the “divergences” may be starting to develop. A lower low last week , but not confirmed with a lower RSI (lacking momentum), declining open interest (see Weekly) as prices rose, prices manage to close just at (or slightly above) the the 2 standard deviation band. This may be a market that will need time to correct from its condition (see Weekly) but it will and there is likely higher prices and more short covering headed into the game.

Major Support:, $1.595, $1.52-$1.519, $1.432, $1.312
Minor Support :
Major Resistance: $1.863, $1.94-$1.967, $2.00, $3.00, $3.16, $3.48, $3.536, 3.59,

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No Change Yet

Weekly Continuous

Though nothing was defined as changing the lower low on continuous prices and lower RSI (momentum indicator) confirmed that the bias is still bearish. In the Daily Continuous with RSI you will notice a lower low in price but not confirmed in the RSI- the first steps in creating a potential bottom. Lets review the last week:

After the long weekend March gas gapped lower -down into the support zone between $1.500 and $1.600, and to $1.522. From there prices reversed higher to record the largest one day gain of its tenure as prompt. A round of pre expiration short covering propelled extremely oversold March (mentioned previously) to back to back daily gains. From there the short lived rally predictably failed just above the a continuation trend line declining from the January highs. The now soon to expire prompt gave up all of the modest gain to end the week $.006 lower. March’s sixth straight weekly decline left prompt gas still within the zone of support that limited declines in ’96, ‘97, ’98, ‘ 99, ’01, ’15, ’16 and ’20.

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Storage Report Brings Consolidation

Daily Continuous

With the recent bearish trade, my expectations that the new headlines regarding production cuts would become history and declines would continue again. To my surprise, declines were held to the previous day’s lows. Time will tell if the operators comments will drive prices longer term. Until then, continue to play the call spreads, mentioned earlier in the week, using the further summer months.

Major Support:, $1.595, $1.52-$1.519, $1.432, $1.312
Minor Support :
Major Resistance: $1.863, $1.94-$1.967, $2.00, $3.00, $3.16, $3.48, $3.536, 3.59,

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Late Strength Held

Daily Continuous

The late day rally yesterday was confirmed as prices remained strong throughout the day. The rally was based upon news that some operators were lowering production volumes and limited new projects. Not exactly sure what the sellers (hedge funds) were thinking with production being strong while prices were at $1.50 or below at the well head. The only tool the operators have is the amount they produce and drill for. The first salvo has now been fired — and today (storage report) will provide further insight as to bias near term.

Major Support:, $1.595, $1.52-$1.519, $1.432, $1.312
Minor Support :
Major Resistance: $1.863, $1.94-$1.967, $2.00, $3.00, $3.16, $3.48, $3.536, 3.59,

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Well That Is Interesting

Daily Continuous

Did not see that move at the end of the trade day. Outcry session closed under normal action and then prices jumped $.10 in less than 10 minutes (after hours light volume but significant volume) almost looking like some sort of fundamental news hit the wire. Regardless, that shows the potential impact of a short covering event– not sure if that is the beginning but can guarantee that the slight rally did not have any impact on the short level of open interest. Most interesting to me is the storage report later in the week and how prices react. There is a potential, for some signals that market may give on how prices trade through the rest of the week.

Major Support:, $1.595, $1.52-$1.519, $1.432, $1.312
Minor Support :
Major Resistance: $1.863, $1.94-$1.967, $2.00, $3.00, $3.16, $3.48, $3.536, 3.59,

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Contrary to Expectations

Daily Continuous with RSI

Several of the reasons that form my conclusion that this current decline may be coming to an end, are found in the Weekly section of the web site, but the market wanted to make sure I may have jumped ahead of myself by extending the declines slightly on the light volume President’s Day. To frank I did mention that the is likely coming just not sure when. Well it didn’t yesterday. Due to the condition of the oversold market the value of some call spreads later in the summer are reasonable.

Major Support:, $1.595, $1.52-$1.519, $1.432, $1.312
Minor Support :
Major Resistance: $1.863, $1.94-$1.967, $2.00, $3.00, $3.16, $3.48, $3.536, 3.59,

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Perhaps A Change Initiating

Weekly Continuous with RSI Study

March closed the day higher by $.028 for the first time after nine consecutive lower daily closes since the reversal following the failed trend line violation on February 3rd. Since February expiration March has closed lower in all but three days of its tenure as prompt. This past week, on the 8th day of those nine straight lower closes March traded into the historical support zone that has been defined as $1.50 – $1.60, trading into that zone for the next two trading days, trading as low as $1.573 closing below $1.60 once.

The daily ATR (essentially the average daily trading range for the last fifteen days) has fallen from $.312…the highest calculation since 02/02/23, to $143. This is the lowest calculation since 12/11/23 ($.133), two days before the beginning of the rally that 18 trading days later resulted in the January high ($2.235 – $3.392). While March has been the prompt contract total open interest has increased more than 140,000 contracts (the total number of contracts outstanding had already increased more than 117,000 contracts from 12/26 to 01/30). Together those increases (257,216 contracts) bring the total of contracts outstanding to 1,611,826, the highest total since 10/19/18 which was just before an extension of the Q4 ’18 rally from $3.102 to$4.929 that took just thirteen trading days.

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Bearish Storage Has Little Effect

Daily Continuous

Not sure what fundamental expectations were, but after recovering from some “crab cakes” yesterday- I learned that the storage report was a smaller withdrawal than expected. Prices initially declined, but then during the day, found some buying. My apologies for missing the Daily but in my condition you would not wanted to read my insights. All I can say is “looking for a bottom”.

Major Support:, $1.595, $1.52-$1.519, $1.432
Minor Support :
Major Resistance $2.00, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

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Seven in a Row

Daily Continuous

For the seventh consecutive day prices closed down on the day but the declines have not placed the condition of over sold — but it is starting to become a potential issue. In the mean time, work the trend shaving some profits on the declines in increments. I have left over $.30 on the table but not looking make it back grabbing the knife. There is solid momentum in this move as prices decline through support zones from over 42 weeks ago.

Major Support:, $1.795-$1.766
Minor Support :
Major Resistance $2.00, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

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Declines Just Continue

Daily Continuous

Not much to say that hasn’t been discussed of late. If you are playing this decline — continue to play it on short expectations and gain. If your playing with length ask “why” — never been good at the knife catching business– look for some divergences in the momentum indicators before entering.

Major Support:, $1.795-$1.766
Minor Support :
Major Resistance $2.00, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65