Author: Willis Bennett

Declines Continue to Define Low Range

Daily Continuous

The declines continued and now seem to want to test the $3.00 zone and then perhaps lower. No storage report to bring volatility to prices so would continue to buy support and keep the stops tight (around $3.00).

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 $2.84, $2.38-$2.26, $2.17
Major Resistance $3.16, $3.48, $3.536, 3.59, $3.65

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A Dip Into Strong Support

Daily Continuous

A move early in the day took prices down below the expiration of Nov to $3.099. That low did not get tested again during the day. Price action seems to be a result of winter not arriving and folks are loading up the shorts with expectations of additional declines. Have seen this type of action on weather forecasts early in the season and have watched the covering when forecasts change.

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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New Gap Above

Daily Continuous

The decline yesterday was significant and some what expected as prices had raced off of the new prompt strength. Challenging support now the action has left a new gap on the Daily chart above which will likely act as a magnet for price action in the coming days. Currently prices are about in the middle of the range of action on the continuous chart between $2.98–$3.64. Time to sit back and observe — no need to trade every day.

Major Support: $3.25, $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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Dec Prompt Will Develop Its Range

Daily Continuous

In the title there is the assumption that the Dec contract has not developed its range. The low end of the range has yet to be developed and then tested. Last week did not achieve that objective. Perhaps, this week will give us further insights. Check the Weekly for the broader expectations.

Major Support: $3.25, $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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Prices Retain Most of the Premium

Weekly Continuous

Despite new prompt December’s $.319 premium over expired November at last week’s close there was no expiration gap to begin December’s tenure (as there was on 09/28. Rather than building on that premium as November did, the new prompt immediately began to narrow the difference. December traded lower $.165) but not nearly enough to reach the target zone ($3.16 – $3.25). The price decline then rallied to a higher continuation high confirmed a new short – intermediate trend line.

On a continuation basis prompt gas traded a higher weekly high, began to challenge some old support that was decisively violated during the collapse from the ’22 highs (the December ’21 low and the low of calendar ’22, $3.543 – $3.638, see chart above), and closed at the highest weekly settlement since the first week of ’23. As bullish as that seems, December failed for the third time in four weeks at its 40 – week SMA, ended the week only $.032/dt higher and clearly remains in a range.

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Market Above Surface — Treading Along

Daily Continuous

Storage report provided little impact on prices yesterday as the treading continues. If your active trading you have to be patient and work the larger points of support or resistance to initiate positions. The general market is bullish (higher highs and higher lows) and the seasonal is bullish as we are in Q4 which historically brings strength. Fundamentals show a bunch of gas in the storage as we head into winter, production remains at summer highs, and the only wild card is LNG (been strong of late and growing). Good luck picking your direction as the market is in the middle of the Dec range.

Major Support: $3.25, $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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Slight Retrace but Not Enough Yet

Daily Continuous

Developing a new word instead of the old range bound that I have been using for the last few month– how about “treading”. Treading up then to tread down only to end up at the same place on the hamster wheel. So here we sit waiting for some key piece of information (likely fundamental) that will lead to some directional bias and volatility. Did I mention the storage report is coming out tomorrow.

Major Support: $3.25, $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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Has the Low Side of Dec’s Range Been Defined?

Daily Continuous

Not sure if the low yesterday will end up being the low for the Dec contract but it was a good start. Not trading down to the close of the Nov contract is important but not critical. In fact it does set itself up as a support zone for the life of the Dec contract. The technical explanation for yesterday is prices tested support on Monday only to run short of additional sellers yesterday and with some supportive fundamental data the mood of the market swung to the bullish bias. Keys will be how long this bias remains in the market.

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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Expected Declines

Daily Continuous

As discussed in the reports yesterday, prices declined to absorb some of the premium afforded to the December contract but not convinced that that the premium will not be reduced some more. Keep your eyes on the Continuous price charts as they will reflect where the market may go rather than the prompt chart provides.

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 $3.42-$3.48, $3.536, 3.59, $3.65

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Nov Well Bid Into Expiration

Weekly Continuous with Volume

After selling lower prices could not far enough to close the gap from the Sept 28th expiration low and gap ($2.781 – $2.820), soon to expire November flipped, rallied, and filled the gap on the high end from the previous week and then extended the rally another +/-$.20 before fading into expiration. Even with the decline from $3.401 to settle at $3.164 November went off the board $.265 above last week’s close and at the highest contract settlement value since January ’23 at $4.709 in Dec ’22.

Mentioned in the Daily and Weekly reports of the tendency for prices to return to test the breakout level of support (resistance once violated becomes support if the breakout is valid). Prompt gas followed that technical script closely, but while that was going on November remained confined in a range it had created and discussed last week, trading between $2.825 and $3.485. Just before October expiration November tested the lower boundary of that zone. Two weeks after that successful test it tested the upper boundary of that range (trading to $3.471- just short of its August high. The Nov prompt’s strong rally into expiration, a very rare event in 2023, fell well short of that upper boundary $2.401 vs $2.471, and the settlement at $3.164 was just about midway within that range.

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