Author: Willis Bennett

Declines Ran Out of Steam (For Now?)

Weekly Continuation

The expected, July contract gave up the record premium that had been awarded over expired June. The new prompt traded just through June’s expiration low ($2.138 v $2.143) nearly on the the value of a trend line rising from the April/May lows, before recovering a few cents. In four of the last five weeks prompt gas has settled between $2.113 and $2.181 as daily and weekly trend lines steadily made their way to convergence with current price above the February/March/April/May lows ($1.967 – $1.944 – $1.946 –$ 2.031) while volatility continues to decline.

Violation of the trend line rising from the April/May lows (currently $2.144 and rising $.005/day) will suggest another test of the support presented by calendar month lows bracketing $2.00.Violation of the trend line declining from the May high (currently $2.290 and falling about $.04/day) will suggest a forthcoming test of the downtrend defining trend line drawn from the August/November/December highs (currently $2.383 and falling $.186/week). Expect July to successful test both ascending and declining short – term support and resistance.

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New Month — Same Range

Daily Continuous

Well it might of been exciting for some to see the premium that July had over the expired June — as you know it was expected and the dog did not quite catch the car (see Daily on Friday). So here we sit in another range bound market — perhaps for the month of calendar June.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support: $
Major Resistance $2.543-$2.604, $2.836, $3.00, $3.536, 3.595

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Early May Lows Look Targeted

Daily Continuous

Spoke about the chase for the early May lows yesterday and it continued. Expect this dog to “catch the car”– my question is what does it do after— I have heard that exhaust pipes from cars can be quite hot.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support: $
Major Resistance $2.543-$2.604, $2.836, $3.00, $3.536, 3.595

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Testing For Lower Monthly Low

Daily Continuation

Discussed in the Weekly Section about the series of high lows defining that a base was building for a future rally. Clearly, with the trade of the last couple of days — some folks don’t like the concept of the lows building a base and want to make sure that the lows are not the low end of the range. Either they push to a lower low or it will find some buying– did I mention the storage report is tomorrow–either way it should be an interesting to witness the outcome.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support: $
Major Resistance $2.543-$2.604, $2.836, $3.00, $3.536, 3.595

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Retrace to Last Week’s Low

Daily Continuation

As expected the new crowned prompt July corrected to last week’s low and in doing so– gave up any premium July maintained to June. It looked for a while that yesterday was destined lower than last week’s but in the last hour of trade prices got a solid bid and rallied back into the middle of the day’s range. History of weakness in early calendar June trade suggests declines may not be concluded– we shall see.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support: $
Major Resistance $2.543-$2.604, $2.836, $3.00, $3.536, 3.595

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Base Building Continues

Weekly Continuation

New prompt July ended the week at $2.417, $.236 premium to expired June. July almost always commands premium over June but $.236 is the most generous EVER awarded. The historical fact is that July almost always gives up whatever premium is awarded usually doing so during the first week of June. Candidly, there is no clue for the reason that July has been bid with historically extraordinary premium, but history tells us that July gives it up, and judging by recent history, pretty quickly.

Since the recovery from the February low, trading just below $2, and the early March failure a few ticks above $3, we have discussed the likelihood of the construction of a range between the two extremes (even though the March low was a hair lower see chart below) . During the construction of semi – enduring price ranges rallies are accompanied by when the appropriate strategy is to ignore short covering rallies and wait to buy weakness that takes the prompt to test identifiable support zones while being wary of premium.

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Holiday Trade Takes Prices Lower

Daily Continuation

Discussed the developing medium trade bias in the Weekly area of the website but for now the daily direction is showing a correction to test support and confirm the historical tendencies of weakness early in the July prompt existence. Expect key support zones to be tested ($2.36 and $2.21) in early calendar June.

Major Support: $2.21, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support: $2.36
Major Resistance $2.543-$2.604, $2.836, $3.00, $3.536, 3.595

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Likely A New Range

Daily Continuous

Doubt that the market will test either end of the “new” range that has developed with last week’s rally. July contract is coming in with a $.17 premium to June which places it at the top end of the range. You know I have left the June contract and now trading July or August near term due to the light volume (exaggerated by the expiration June) due to the holiday weekend. Speaking of which, there will not be a Daily until Tuesday May 30th.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support: $2.36
Major Resistance $2.543-$2.604, $2.836, $3.00, $3.536, 3.595

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Break Out Somewhat Tempered

Daily Continuous

So prices broke down after the extension of the recent range to the high side. Looks like the action has tempered the breakout but the week is not over. Perhaps the market is setting up a new range– we will find out the low of a new range in short order.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support: $2.36
Major Resistance $2.543-$2.604, $2.836, $3.00, $3.536, 3.595

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Solid Test Now What

Daily Continuous

Wanted to see the decline and test now need to see and extension below support or do buyers start to show their heads.

Major Support: $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support: $2.50, $2.36
Major Resistance $2.543-$2.604, $2.836, $3.00, $3.536, 3.595