Author: Willis Bennett

You Have to Love Range Trading or Premium Selling

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If you are selling premium (options) or accurately range trading this market you are having a good Q1. This is looking like a market that is in a hurry to go nowhere. Will bring more thoughts when the Daily limits the distribution later in 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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Key Support Never Tested

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Prices never tested the key levels of support before finding buyers and gaining a dime. Perhaps we have developed another range trade and will be testing the resistance either tomorrow or next week. The market has not left the range trade of the last 5 weeks between the $1.50’s and $2.00 but prehaps the market is consolidating in a narrower range.

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,

Coming Close to Key Support

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Suggested some volatility with prices testing support — got some quiet declines but did not test support. Perhaps the storage report will bring a test but not convinced. Until continue the selling of premium as a money making trade until a new bias is confirmed.

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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Going to Get Set For Storage

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What is the saying about lip stick and pigs– not sure but this market is starting to resemble the animal. No serious momentum down — nor was there any follow through at resistance. All I can say is my option positions in April are a day closer to expiration, which being short out of the money calls works to my favor. Lets get some volatility into this pig and challenge the lows of last month in the $1.50’s.

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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A Ying and A Yang To The Market

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Perhaps it is why it is been in a range of late– April gas traded a little less then $.25/dt range this week (the average range of the last fifteen weeks is .41/dt/wk). After first testing very clearly defined resistance just north of $2 (the zone of resistance between those four monthly lows from around this time last year and the historically important January ’24 low (+/- $1.965 –$2.037), the prompt reversed course after trading to $2.009 and fell to slip the “expiration” gap left on February 27th narrowing it to $1.720 – $1.755. Having tested resistance and then support April ended the week quietly. Friday’s range was only .082, the close .03 lower than a week earlier.

The previous week had a reversal off of the expiration low but the flaw in the almost always significant weekly reversal was a lack of volume. Average daily volume fell more than 80,000 contracts during the reversal week. This week following a test of resistance…which was almost guaranteed by the upside reversal, April fell with increasing volume. Volume on Thursday, when more than 600,000 contracts changed hands with the prompt closing $.111 lower, was the highest since 02/22. This week’s trade with a close lower than the open after trading a higher high is also a reversal…and given the significant increase in volume largely neutralizes the wider range reversal traded the prior week. The close in the lower quadrant of the range traded with increasing volume and open interest is a strong suggestion that April is destined to trade lower, the question is now or later in the month.

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Wish It Could Be More Dramatic

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This gets very frustrating for the author as this market does not seem inclined to move any where very fast. As previously suggested — perhaps a time to just make income from selling premium — especially from the call side as price have hit a temporary wall at $2.00.

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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Slight Break Down on the Report

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A little action on the report itself — but in reality it was a slow and methodical meltdown well off of the report release. Price reaction has been trading on fundamental weather forecasts — so to me it will be interesting to watch the selling in the face of 1Bcf/d decline in production and all of the announced declines from the operators.

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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Going To Need an Alarm — Wake Me Up

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A week later and not much has changed going into the storage report. Last week brought little volatility — what will this week bring.

Major Support:, $1.595, $1.52-$1.519, $1.432, $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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Taking Its Time

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Well the break above $2.00 is clearly on the “sloth” approach. Though prices did manage to eclipse $2.00 for a moment — there was not enough to force any sort of covering — just additional selling into the close. Not much to add technical — just a struggle at resistance.

Major Support:, $1.595, $1.52-$1.519, $1.432, $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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A Little Closer

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It climbed closer to the key resistance at $2.00 but could not finish it at the end. Not sure if the April contract will but one would have to believe that prices are going to run above $2.00 during the Q2 high. Is it now or later — no clue.

Major Support:, $1.595, $1.52-$1.519, $1.432, $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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