Author: Willis Bennett

Trade Seeks a Additional Declines

Daily Continuous

After rising early in the week — prices reversed and challenged some of the intermediate term support levels from previous weeks. Though nothing has changed as to the current market environment, a bearish trade within a bullish long-term trend (higher lows since 2020), would expect additional tests of support prior to a rally but well within the 4 month range between $3.00 down to $2.00.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support:$2.52-$2.47, $2.38-$2.26, $2.17
Major Resistance $2.816-$2.836, $3.00, $3.536, 3.59

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Declines Test 2-Week Lows

The storage report provided the spark to send prices down but could not break below the lows last week and the previous week. Not what I would consider a break down to push prices into the $2.40’s. Tomorrow is another day though, so have you’re positions ready.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support:$2.52-$2.47, $2.38-$2.26, $2.17
Major Resistance $2.816-$2.836, $3.00, $3.536, 3.59

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Becoming a Smaller Range

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Compression of the range continues and we all know this is unlikely to continue for very long. Perhaps, with the storage report we will see a breakout or break down to test the support and resistance for a bias play.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support:$2.52-$2.47, $2.38-$2.26, $2.17
Major Resistance $2.816-$2.836, $3.00, $3.536, 3.59

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Small Gains

Daily Continuation

Prices gained slightly during the day neither testing resistance nor support. Stick with the game plan on buying and selling at tests of support or resistance.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support:$2.52-$2.47, $2.38-$2.26, $2.17
Major Resistance $2.816-$2.836, $3.00, $3.536, 3.59

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Prices Firm

Daily Continuous

Surprising to myself, prices firmed instead of extending the declines. Don’t believe it was a change of heart nor directional changes, but just a weak test of support last week and a slight rebound. Play the range identified in the Weekly section.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support:$2.52-$2.47, $2.38-$2.26, $2.17
Major Resistance $2.816-$2.836, $3.00, $3.536, 3.59

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Expect Additional Tests of Support

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Last week provided the initial test of support and declining in the normal post Independence day fashion– now lets see what the low end of this trading range is as last week provided solid tests of several levels (see Weekly section). The high end of the July range has likely been established with last week’s high– but that is not written in stone.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support:$2.52-$2.47, $2.38-$2.26, $2.17
Major Resistance $2.816-$2.836, $3.00, $3.536, 3.59

Prices Test Low End of Support

Weekly Continuation

Declines commenced prior to holiday and continued through the week beginning, to test support areas around the $2.52 – $2.57 area. August found support at a variety of moving averages on the continuation charts and its own. On Friday the continuation 20 – day SMA was $2.563, on the August chart the 50 – day was $2.553, the 10 – week, $2.573. Just prior to the close the prompt traded through all those closely watched short – term technical support levels with very low volume (average daily volume this week was +/- 256,000, Friday’s estimate 255,000, about 100,000 contracts less than last week’s average and well below the 30 and 50 – day averages) but managed to recover enough to close above them. In addition, August held above its 06/21 reversal day low ($2.527), but the buying twelve sessions ago that was sufficient to trigger a daily reversal higher was absent . Even with August’s modest week ending recovery the close was below last week’s low, which readers may recall gives rise to a presumption that whether when the market reopens or later in the week, lower trade should be expected.

Typically, after a decline from a pre – Independence Day high prompt gas trades to a low during the second or third week of July before rallying. In bull market years the low is often earlier, in bear market years later. Given that neither characterization is currently applicable, prompt gas is, likely, confined in a trading range that began to be defined in late January and that August will spend most of its tenure trading between whatever the post – Independence low turns out to be and the late June high. The low end of the range should become defined this week .

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support:$2.52-$2.47, $2.38-$2.26, $2.17
Major Resistance $2.816-$2.836, $3.00, $3.536, 3.59

Declines Continue Testing Support

Daily Continuous

Prices declined to test last week’s low at $2.61 but found some buying the big area if the bears want some action is around $2.52 then from $2.52-$2.448. We shall see — volume doesn’t look like it is supporting the declines in a meaningful way.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support:$2.52-$2.47, $2.38-$2.26, $2.17
Major Resistance $2.816-$2.836, $3.00, $3.536, 3.59

Bears Test the Downside For Now

Daily Continuation

The bears seem to control the early morning and therefore the trade day direction as they waved off the forecasts for demand and started selling, taking prices to the short term support area. There is a lot more trade to July than this early move indicates (see Weekly). For now– I see higher lows and a change in bias — so I will add on the dips.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support:$2.47, $2.38-$2.26, $2.17
Major Resistance $2.816-$2.836, $3.00, $3.536, 3.59

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Early July Trade Has History

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Not sure why prices were down on the early trade on Monday — lack of volume and folks trading likely the culprits. The short term weather had significant demand that will start to show the power demand expected this summer and the potential impacts on storage balances. Went into the medium term impacts for gas in the Weekly section as well as some historical flavor for what happens in July trade. Not convinced that the upcoming week will challenge the $3.00 area, but technical indications are that is a matter of time.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support:$2.47, $2.38-$2.26, $2.17
Major Resistance $2.816-$2.836, $3.00, $3.536, 3.59

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