Author: Willis Bennett

Market Acts Like a Consolidation Phase

Daily Continuation

Yesterday’s $.30 range in prices was one of the lowest of late and was well below the 14 day Average True Range (ATR) which is currently $.52 in the daily charts. Perhaps, the market is pausing in both directions to evaluate the next round of fundamental information. Until the market decides, work the market with some options as the volatility declines, cheapens the cost of the options.

Major Support: $7.956, $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:$8.299, $8.58-$8.61, $9.021, $9.35, $9.40, 9.664–$9.67, $9.98

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Solid Rebound

Daily Continuous

Solid rebound for prices yesterday and have no fundamental reason for it so I will rely on technical data points showing prices a little oversold on the Daily RSI chart and not confirming the break down with extensions lower after testing support.

Major Support: $7.956, $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:$8.299, $8.58-$8.61, $9.021, $9.35, $9.40, 9.664–$9.67, $9.98

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Prices Look to A Rebound

Daily Continuation

After a “consolidation” period for trade for three days last week, perhaps prices are ready to start a rebound higher or an extension lower in the coming week. Needless to say that the historical momentum for lower prices remains (but dwindling) and the market is heading into a bullish period associated with the fourth quarter.

Major Support: $7.956, $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: $8.205-$8.299, $8.58-$8.61, $9.021, $9.35, $9.40, 9.664–$9.67, $9.98

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Near Term Support Holds For Now

Weekly Continuous

Prices extended their decline on the return of trade after the weekend. As discussed, this period of the year is one on the most bearish periods for trade during the year. The declines last week sent price below the 50 day SMA for a close below that zone for the first time since mid-July . The zone between the 50 – day SMA, this last week’s low, and the August low ($7.532) is serious support for October and for the intermediate term uptrend that began following the July low.

With a consolidation pattern developing, the technical indicators typically fluctuates between neutral with a price positive bias and neutral with a price negative basis while a trading range is being constructed. Open interest was steady as the market fell to close lower (a slightly technical positive, but that was offset by increasing volume) . Volatility remains historically extreme with this week’s range $1.375 was greater than the 15 – week average ($1.300). Before the gas market is ready for another leg up daily and weekly ranges tend to compress as buyers and sellers approach a balance forming an equilibrium of a sort.

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Consolidation After Major Declines?

Daily Continuation

Prices tried to extend the declines after the report but each attempt into high $7.80’s found buyers. Perhaps the market is starting the consolidation process after loosing over $2.25 since the highs last month. Time will tell as the market remains in the historically bearish period of the year.

Major Support: $7.956, $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: $8.22, $8.58-$8.61, $9.021, $9.35, $9.40, 9.664–$9.67, $9.98

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Conforming With Labor Day Weakness

Daily Continuation

The twenty – years average of the seasonal declines for the weakness from the mid August high to the Labor Day low is 16.35%, but in recent years the decline has significantly moderated. With the high of $10.04, continuous chart, last month and the low from yesterday at $7.751 the historical average has been met and surpassed (nearly 23% decline) . Whether on time, a little early or a little late, apart from the late summer on ’00, since natural gas began trading at the NYMEX in the spring of 1990 a period of price weakness is consistently distinguishable between mid – August and mid – September. We just don’t know if the declines are over or is there more room to go.

Major Support: $7.956-$7.91, $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: $8.58-$8.61, $9.021, $9.35, $9.40, 9.664–$9.67, $9.98

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Now That Is An Extension

Daily Continuation

Prices continued the extension of the declines, as prompt dipped below $8.00 briefly, challenging the 50 day SMA and attacked the 20 Week SMA that have been well held support zones lately. The key will be how does the market respond on this test. If support holds then the range up to $9.00 remains, a break down below will suggest the lows of early August around $7.50 are in target.

Major Support: $7.956-$7.91, $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: $8.58-$8.61, $9.021, $9.35, $9.40, 9.664–$9.67, $9.98

Seasonal History Wins

Weekly Continuous

Spoke in the last Weekly that last week was going to be a struggle between the trend of well bid expiration’s and the weakness associated with the Labor Day holiday (one of the historically weakest periods for natural gas). While the expiration went off rather benignly, prices collapsed on Friday before the extended weekend.

As mentioned in the last few Wekly’s, the period bracketing Labor Day is one of, if not the most consistently price negative all year. Typically, prompt gas trades to a late August high and then declines to a post – holiday/mid – September low.

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Friday Collapse — A Directional Indication or Short Term Profits

Daily Continuation

The collapse on Friday is concerning for the bulls, but the general action last week does not show that prices will extend significantly the losses from Friday’s trade. Go into the history about this time of year in the Weekly section, and would not be surprised to see some weakness as prices open today. It remains this analysts view, to follow history showing Q4 highs have been higher than Q3 highs in every year since ’00 except ’01, ’08, ’10, ’11 and ‘14. Be careful here to establish position for the upcoming Q4.

Major Support:$8.47-$8.40, $7.956-$7.91, $7.55, $7.14, $7.078, $6.88, $6.754,$6.38, $6.02, $5.623,
Minor Support$$8.619 $7.35, $7.41, $6.42, $5.548, $5.40-$5.45
Major Resistance: $8.58-$9.021, $9.35, $9.40, 9.664–$9.67, $9.98

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A Brief Pause

Daily Continuation

I found an internet signal briefly this afternoon–Please read the Weekly section that was updated today. It seems that the market is establishing whether the recent move was warranted and likely waiting for the upcoming storage report to confirm the recent run.

Major Support:$8.47-$8.40, $7.55, $7.14, $7.078, $6.88, $6.754,$6.38, $6.02, $5.623,
Minor Support$9.36-$9.41, $9.057, $7.35, $7.41, $6.42, $5.548, $5.40-$5.45
Major Resistance: $9.664, $9.98

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