Author: Willis Bennett

Selling Begets Selling

Daily Continuous

The market is poised to test the lows from earlier in the spring (discussed in the Weekly) and is starting to add to the declines in the Sunday night trade. Not sure if the storm will impact prices as the potential for demand destruction was well known on Friday afternoon. Continue to expect the Q3 low to be established between now and Labor Day weekend.

Major Support:, $1.848, $1.52-$1.511, $1.481, $1.312
Minor Support : $2.00, $1.967- $1.94
Major Resistance: $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16

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This Defines Consolidation

Daily Continuation

Up eight down five welcome to the consolidation world. This is the perfect environment for selling premium which I will continue to do.

Major Support:, $1.848, $1.52-$1.511, $1.481, $1.312
Minor Support : $2.00, $1.967- $1.94
Major Resistance: $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16

Slight But Solid Gains

Daily Continuation

The first day of the September contract as prompt showed some slight strength but time will tell for the contract. Still expecting the lows later in the month so perhaps this is just some consolidation until the next decline occurs.

Major Support:, $1.848, $1.52-$1.511, $1.481, $1.312
Minor Support : $2.00, $1.967- $1.94
Major Resistance: $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16

Expiration Trend Continues

Daily Continuous

The trend of expiration’s continue as the August contract was well offered just as it’s predecessors. With the light volume associated for the last week would not expect any great volatility in the next week. Perhaps the demand will bring some support – but it should be short lived.

Major Support:, $1.848, $1.52-$1.511, $1.481, $1.312
Minor Support : $2.00, $1.967- $1.94
Major Resistance: $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16

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Is It the Q3 Low

Weekly Continuation

Failure at the conventional and trend line resistance on Monday and again early Tuesday (20 Week SMA) put August on the same track as its predecessor contract months which (as discussed in the Daily) a low volume decline into expiration. With one day left for prompt August before it goes to settlement, technically it does not matter what happens tomorrow unless there is some kind of high volume price surge (regardless of early Sunday night trade). Given that Friday’s close was the lowest daily close since May 1st and the lowest weekly close since prompt May settled at $1.619 on Friday April 26th, the chances of another “amply offered” expiration seem greater.

The bottom line is that prompt gas held a zone of support defined by the March high ($2.009), the mid – April high ($1.943, the high of week ending 04/12) and $1.913, the low of calendar May, as trading for the last week of August’s tenure ended, tenuously. For the first time since just after the “expiration” gap following May going off the board, prompt gas traded sub – $2…to $1.994, and September ain’t far behind ($.045 premium to August).

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Can’t Argue With Another Weekly Low Close

Daily Continuous

As the predecessors before it this year, the August contract was amply offer into the close last week and traded below $2.00 for the first time since last spring. Go into expectations in the Weekly section, so I will not repeat here. Suffice to say that the lower weekly close is a bearish indicator and none of my momentum indicators show the market as oversold (though approaching) so an am;y offered expiration should still be in the cards — though late Sunday trade has the market firming.

Major Support:, $1.848, $1.52-$1.511, $1.481, $1.312
Minor Support : $2.00, $1.967- $1.94
Major Resistance: $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16

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Storage Pressures Further

Daily Continuous

Don’t think I am going out on a limb here but I think the August contract is going to follow the previous contracts by being well-offered into expiration. What is getting more interesting is the Winter ’25 summer ’25 spreads during this decline.

Major Support:, $1.848, $1.52-$1.511, $1.481, $1.312
Minor Support : $2.00, $1.967- $1.94
Major Resistance: $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16

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Testing, Testing and Testing

Daily Continuous

Last Week’s lows continue to provide the near term support for the declines to help establish the low end of the range. This range should hold the majority of trade for the upcoming few weeks. Spread traders may want to look at some of the winter 2024/5 trades in the coming weeks as the low end of the range occurs.

Major Support:, $1.848, $1.52-$1.511, $1.481, $1.312
Minor Support : $2.00, $1.967- $1.94
Major Resistance: $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16

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Finding Support

Daily Consolidation

Not sure how long this run will last, but it is good to see some rebound (as discussed in the Weekly). It may just be providing trade a new place to short or it may be gradually starting to run in small steps.

Major Support:, $1.848, $1.52-$1.511, $1.481, $1.312
Minor Support : $2.00, $1.967- $1.94
Major Resistance: $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16

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Some Slight Consolidation

Daily Consolidation

Declines slowed and consolidation at the lows of last week provided the market a chance to take a breath from the oversold RSI at the lows. Higher volumes on the declines and gaining open interest during the declines suggest that the market is expecting additional extensions lower.

Major Support:, $1.848, $1.52-$1.511, $1.481, $1.312
Minor Support : $2.00, $1.967- $1.94
Major Resistance: $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16

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