Author: Willis Bennett

Weekly Continuation

Did not send out a Weekly analysis on Sunday so I wanted to share comments from the weekend charts (even though they are current for this week). In last week’s items there was a discussion of a very significant zone of support between +/- $2.330 and $2.450. Analysis strongly suggested that August gas would be “drawn” into that zone before rallying. When trading resumed, August was offered below lthe previous week’s low and expecting that the triggers for additional selling within that zone would be hit. It did not happen. Following a low print of $2.484 August reversed course and ultimate traded through last week’s high (forming an “outside” week reversal higher) and did that with increasing volume. Perennially amply offered August (although it certainly wasn’t last year) closed higher for the first time in four weeks. Prompt August has redefined support with back to back weekly lows of $2.484 and $2.492 ( four of the last five weeks between $2.448 and $2.536; resistance with consecutive weekly highs of $2.793, $2.750 and $2.789–with four of the last five weeks between $2.740 and $2.83.

The two day rally failed at the start of the week fell a little short of last week’s high ($2.750 v $2.793), which was lower than the previous week’s high and the rally gains were quickly forfeited. With volume increasing the prompt tested last week’s low but held just above $2.536 ($2.539)…lower trade for a third straight day validated last week’s ideas of lower trade as the post – Independence Day decline was extended to $2.492.

The historically consistent seasonal decline from a late June high (measuring from the 06/20 recovery high of new prompt August), was extended to $.336 or just about 12%. That is a little more than the three and five years average declines, a little less than the average of the last ten years. While the memory of last year’s rocket ride from the post – Independence Day low (from an 07/05 low of $5.325 August ’22 rallied to a 07/26 high of $9.752) is still fresh, the recent price action is more typical of July trade. Declines should be extended a little further before sufficient sponsorship is uncovered to lift August to a somewhat higher expiration. History suggests that over the years August has settled lower than July far more often than not, but August has been higher in each of the last three.