Author: Willis Bennett

Continued Bearish Bias

Weekly Continuation

Going to keep it brief this evening and will expand during the week as my granddaughter decided to give me her respiratory bug. Actually, not much to say except the element of trade that has kept the market from becoming grossly over sold is the premium that the new prompt brings after expiration of the previous contract. Will go into the specifics during the week but the market is oversold and is setting up for a reversal (doubt it will be today).

Major Support: $2.82-$2.78, $2.74, $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.68, $2.38-$2.26, $2.17
Major Resistance $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

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Down and Down Further

Daily Continuous

Under the weather (so to speak) from my granddaughter’s virus — will be back on board (I hope) tomorrow — all I can say tonight is that prices are lower Sunday night and want to go lower.

Major Support: $2.82-$2.78, $2.74, $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.68, $2.38-$2.26, $2.17
Major Resistance $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

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Close But No Cigar Yet

Daily Continuous

Was expecting prices to go down to the expiration level of the Dec contract — while close not quite ($2.68-$2.706). Starting to wonder with all the bearish fundamental (forecast data) built into the Jan contract — What is going to send it lower– don’t think technical data points will as they are starting to become over sold– would be hesitant to initiated significant bearish positions here.

Major Support: $2.82-$2.78, $2.74, $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.68, $2.38-$2.26, $2.17
Major Resistance $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

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Bearish Extends Closing Jan Premium Expected

Daily Continuous

Bearish trade continues and would expect further declines on the storage report unless all the folks have already sold in anticipation. We shall see but it is not looking good for bullish positions.

Major Support: $2.82-$2.78, $2.74, $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.38-$2.26, $2.17
Major Resistance $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

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Expiration Gap Closed

Daily Continuous

It took some time but the expiration gap from last September finally got filled. So trade action closed both gaps it inherited — both resistance and support. Now what– my attitude will remain consistent with prior months in letting the market define its bias near term– but there is a clear bearish tilt going on now.

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Bearish

Daily Continuous

Breaking trend line support and most moving average support lines, the declines have been impressive– so breathtaking that profit taking has commenced. We all know it isn’t going to zero (well at least not tomorrow) so warm weather forecasts will only last for a period of time and then the flip which will be ugly. In the meantime play the short side for daily trades.

Major Support: , $2.82-$2.78, $2.74, $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $3.16, $2.84, $2.38-$2.26, $2.17
Major Resistance $3.00, $3.48, $3.536, 3.59, $3.65

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Pushing Toward Major Support

Weekly Continuous

There are four trading days left in calendar November and the prompt has lost $.753/dt ( 21% from the 11/01 high to Friday’s close), while prompt – in – waiting January has lost $.842 as the premiums awarded deferred months continue to be compressed. This week’s low for January gas, $2.933 also happened to be the same as the contract’s low for the first week of June 2021.

With the weekly close only $.115 higher than the low close of 2023 and $.259 higher than the low close of 2021 (all weekly closes of ’22 were higher), the market may be providing opportunity to add to length. Note that December ’24 is currently priced at $4.039 making the “new” continuation strip certainly higher when December goes to settlement and is replaced. My thoughts are not to pay the premium that results from that replacement but rather to bide your time and wait for the premium in the differed contracts to dissipate while keeping a close eye on the support between those old continuation lows and the average settlement value of the last twelve months or so.

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Press Lower

Daily Continuous

As suggested in the Weekly yesterday, prices pressed lower and are now starting to attract the major support areas from the summer (what was resistance is now support). This will be interesting as volume during the holiday week is historically weak and may make the extending the declines easier.

Major Support: $2.98-$3.03, $2.82-$2.78, $2.74, $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $3.16, $2.84, $2.38-$2.26, $2.17
Major Resistance $3.48, $3.536, 3.59, $3.65

Last Week Provides Negative Near Term Bias

Daily Continuous

Provided some insight as to the negative bias from last week in the Weekly section– but the bias is clearly negative and further declines should be expected. However, that being said there is some areas of significant support coming up so the trade will provide some interesting input.

Major Support: $2.98-$3.03, $2.82-$2.78, $2.74, $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $3.16, $2.84, $2.38-$2.26, $2.17
Major Resistance $3.48, $3.536, 3.59, $3.65

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Down– But Out???

Weekly Continuation

Since closing at $3.473 two weeks ago (the second highest weekly close of 2023) prompt gas has given up $.513/dt on a weekly closing basis. The rally from the March low to the October high ($3.630) has been retraced by a little over the 38.2% (Fibonacci retracement–technical level) but prompt gas remains above the intermediate term uptrend defining trend line rising from the April – May lows (Chart above). This trend line has been tested several times since the spring low. I would allow this as a pretty normal correction– 50% retracement of the rally is $2.787, which happens to be almost exactly the price needed to close the “expiration gap” left on 09/28 (natural gas abhors a vacuum). Prices declining will once again test the rising trend line (on a daily continuation basis the value of that trend line begins the week at $2.807) then test the 20 – week SMA (currently $2.832).

Technical thinking was that December would retreat to test support at the double bottom left on 10/03 and 10/23 (twin weekly lows at $3.216), the lower boundary of an orderly trading range. Indicators did not expect the gap lower on 11/06, a gap that remains open and confirms an RSI bearish momentum divergence. The combination of those technical factors suggests declines have not concluded.

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