Author: Willis Bennett

Prices Firm Slightly

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Prices extended lower yesterday only to find support and rally back slightly, closing the day near the highs of the day. This may be the beginning of the recent trend of expiration’s being well bid. Key for today is the options expiration so expect excitement at $7.00 and $6.75. Directional focus will be shown in the Dec, Jan, and Feb contracts as the market defines its upcoming directional bias.

Major Support: $6.737-$6.727, $6.519, $6.504, $6.38, $6.02, $5.623,
Minor Support $6.42, $5.548, $5.40-$5.45
Major Resistance:$7.18, $7.532, $7.71-7.75, 8.021, $9.05-$9.12,$9.35, $9.40, 9.664–$9.67, $9.9

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Technical Damage

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There was significant technical damage last week and go into the results in the Weekly section. The damage does not end the bull market bias dating back to 2020 but it will make rallies beyond the now well defined resistance very difficult. We are headed into expiration and it is well documented that the market has a tendency to be well-bid.

Major Support: $6.737-$6.727, $6.519, $6.504, $6.38, $6.02, $5.623,
Minor Support $6.42, $5.548, $5.40-$5.45
Major Resistance:$7.18, $7.532, $7.71-7.75, 8.021, $9.05-$9.12,$9.35, $9.40, 9.664–$9.67, $9.9

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Exciting Week With Ramifications

Weekly Continuation

Contrary to the writings this summer, October tested the August lows ($7.532 – $7.550) and broke below as support could not hold that area. For only the second time in the last ten years, the August lows broke down in September. When there was insufficient sponsorship for near term gas to hold the well – defined support, October plunged to a low of $6.737, as trading for the week concluded . To a lesser degree, it took the rest of the maturity curve and strips followed the declines. Neither of the two previous violations of the August lows (in ’20 prompt gas traded an “outside” month reversal to the upside and, in the other -’15- prompt gas was in a downtrend already 18+ months old), appear to present an acceptable similarities for the remainder of ’22.

Serious, resistance has been clearly defined by multiple calendar month highs from May through September, all between +/- $9.40 and $10.028, but where is support sufficient to overcome the momentum built to the downside since the failed late August breakout? Since prompt gas first closed over the continuation 40 – week SMA in August ’20, the rising moving average has been tested multiple times recently at the July – Q3 low. Only during December ’21 has it been violated on a weekly closing basis for more than a single week. Currently the value of that rising moving average is $6.489. For several weeks there has been the exceptional separation from intermediate/long – term trend defining 40 – week SMA (the high weekly level was 55% above that Average). While it sometimes takes longer than we think to materialize, prices should trend back toward the mean mean is as close as it gets to a technical certainty. Currently the separation is 5.2%. It should be noted that before the July low was traded the week ending separation reached 2.6%. During that week prompt August traded +/- $.23 below the moving average, before prompt gas turned and rallied to a higher high.

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Another “Quiet” Day

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Price action took another day trading in a quiet range considering the last few months. Starting high end and giving up the gains during the day only to find footing toward the end. This consolidation will set up the next move and there are no clues whether it was either up or down. The recent range between $8.25 and $7.50 is the market for now so trade accordingly.

Major Support: $7.55, $7.14, $7.078, $6.88, $6.754,$6.38, $6.02, $5.623,
Minor Support $7.35, $7.41, $6.42, $5.548, $5.40-$5.45
Major Resistance:$8.26, $8.32, $8.45, $9.021, $9.05-$9.12,$9.35, $9.40, 9.664–$9.67, $9.98

A Day of Consolidation

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Prices quieted down yesterday and only traded in a $.34 range from high to low. Mentioned yesterday that the impact of fundamental information may be diminished during this shoulder season. Does not mean there may not be volatility but yesterday provided a brief hiatus to this summer’s radical levels and there may be additional quiet days coming.

Major Support: $7.55, $7.14, $7.078, $6.88, $6.754,$6.38, $6.02, $5.623,
Minor Support $7.35, $7.41, $6.42, $5.548, $5.40-$5.45
Major Resistance:$8.32, $8.45, $9.021, $9.05-$9.12,$9.35, $9.40, 9.664–$9.67, $9.98

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Early Weakness Finds Support

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Prices opened Sunday night with $.20 weakness and held that until the full market opened and support started immediately. The rebound took prices to near term resistance and now the market will have to prove the support accurate and carry the gains further. Fundamental issues will have little impact (barring tropical) as the winter forecasts are in place so the impacts are built into the price action.

Major Support: $7.55, $7.14, $7.078, $6.88, $6.754,$6.38, $6.02, $5.623,
Minor Support $7.35, $7.41, $6.42, $5.548, $5.40-$5.45
Major Resistance:$8.32, $8.45, $9.021, $9.05-$9.12,$9.35, $9.40, 9.664–$9.67, $9.98

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Declines Baby

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The price action on Thursday and Friday was just brutal (to the downside) as folks figured out that rail strike was not going to happen and then the bears wanted to punish the rally on Friday. Sure looks like prices are headed to $7.00 but not just yet (perhaps after winter becomes defined). If you want to be long the winter into the Q4 — this gives a great chance to establish positions.

Major Support: $7.55, $7.14, $7.078, $6.88, $6.754,$6.38, $6.02, $5.623,
Minor Support $7.35, $7.41, $6.42, $5.548, $5.40-$5.45
Major Resistance:$8.32, $8.45, $9.021, $9.05-$9.12,$9.35, $9.40, 9.664–$9.67, $9.98

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Price Collapse

Weekly Continuous

Prices declined off of the “fake” rally on the rail strike and closed the week down. The “outside” week range with the close approximately equal to the previous week’s low is a significant technical negative. The coming week will be critical for October. Given the weekly reversal, weak close, the first close under the continuation 20 – week SMA since the week of the July Q3 low, the technical odds favor further testing of the last two weekly lows. Violation of that recently support would suggest an immediate test of the August lows $7.532 – $7.550 (the August low of October gas was $7.536).

Market internals continue to provide little support for any continuation of the uptrend…and not much more for extension of the decline from the August high. This week open interest declined as prompt gas rallied to close higher from Thursday to Thursday…a neutral indication at best. Open interest has remained in tight range all summer . Average daily volume was just about unchanged even though volatility increased– neutral.

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Give and Take

Daily Continuation

Hope none of you folks got sucked into that concept two days ago that the “rail strike” would impact gas. The strike was never going to happen as all the powers in Washington were going to see to that event did not happening. The market is basically back to where it was before the rail issue surfaced. Prices are dancing around the 50 day SMA, so that will provide no insight on the future movement– I could see declines to $8.00 and can also suggest prices to $8.50 so no unique technical insight here except the seasonal which historically shows a price rally into the Q4.

Major Support: $7.956, $7.55, $7.14, $7.078, $6.88, $6.754,$6.38, $6.02, $5.623,
Minor Support $8.325, $7.35, $7.41, $6.42, $5.548, $5.40-$5.45
Major Resistance:$ $9.021, $9.05-$9.12,$9.35, $9.40, 9.664–$9.67, $9.98

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So Much For Consolidation

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Not exactly sure what hit the market (news) in last hour+ of trade but it got some folks excited. Prices rumble through $9.00 with out much issue and now it seems that prices look to want to test the highs from mid August before the Labor Day decline, I just don’t see the $10.00 level in the immediate future. This is still (for the last year+) a bull market trend so positions should reflect that trend.

Major Support: $7.956, $7.55, $7.14, $7.078, $6.88, $6.754,$6.38, $6.02, $5.623,
Minor Support $8.325, $7.35, $7.41, $6.42, $5.548, $5.40-$5.45
Major Resistance:$ $9.021, $9.05-$9.12,$9.35, $9.40, 9.664–$9.67, $9.98

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