Author: Willis Bennett

Spot Closes At It’s Lows

Daily Continuous

Prices opened Sunday fulfilling the expectation of lower prices during the expiration of the September contract as discussed in the Weekly area. Suggest reviewing those comments for not only the upcoming expiration, but also prices later in the year.

Major Support: $2.727, $2.648, $2.514
Minor Support :
Major Resistance:$2.843, $2.97-$2.99-$3.00, $3.061,$3.192, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461,

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Expect Further Declines

Weekly Continuous

The collapse continued last week as prices extended the declines though some support trend lines and previous month lows. The violated trend line now becomes ascending resistance, as the dominant near term technical factor. Given soon to expire September’s weakness into the week’s close the trend line is likely to contain any near term short covering rally as well as any early sponsorship for October (which closed at $2.800, $.122 premium to September and also below the coming week’s value of the trend line). Given the violations of trend line support during the last two weeks and prompt gas entering the seasonally weak period during the coming week (Labor Day falls on September 1st this year), the upside prospects for the expiring contract and new prompt October seem low.

Historically, the days leading into and following Labor Day has been one of the most consistently price negative periods all year. Since I first noticed the tendency, declines were and continued to be consistently in double digits. When they weren’t (which was rare) I learned from history, that when the markets that fail to decline when they are supposed to (based on historical norms) are likely going to go up and less than average declines tend to precede robust Q4/Q1 rallies. In ’23 the decline was 12.5%. The entire Q4 rally was a little more than a dollar counting the premiums awarded to the November and December contracts. The Q4 peaked on 10/31/31 at $3.630, 70% higher than the pre Labor Day low. A year ago the Labor Day decline was short and measured only 7.4%. During the period that immediately followed (about three weeks) prompts October and November rallied $.894. You might remember that the rally that began from the pre Labor Day low was not exhausted until early March with the prompt price 164% higher.

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Storage Report on Que

Daily Continuous

Perhaps a brief response to the bearish date flooding the market, a small bounce took prices higher through the day. For bulls be cautious, for bears wait and and sell against any rally .

Major Support: $2.727, $2.648
Minor Support :
Major Resistance:$2.843, $2.97-$2.99-$3.00, $3.061,$3.192, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461,

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Declines Stall

Daily Continuous

I guess the storage report today won’t be as bearish as last week’s as the market ran low on sellers yesterday. touching the lows from Tuesday — there was no momentum to push prices lower. I suspect that there will be additional downside momentum today if the report is more bearish that current expectations– unlike last week where the seller’s came in before and there were none left when the report was released (at expectations).

Major Support: $2.727, $2.648
Minor Support :
Major Resistance:$2.843, $2.97-$2.99-$3.00, $3.061,$3.192, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461,

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Low End Range Tested/Broken

The new low for 2025 is now in the process of being completed as prices continued the declines and broke below previous trade lows. Can’t say if this softness is in anticipation of the storage data or just normal seasonal weakness around the Labor Day holiday– either way it is soft out there and few buyers currently. If you are an end-user (consumer of natural gas) you may want to look at the winter strip for gas as a hedge (perhaps Dec and Jan at least).

Major Support: $2.727, $2.648
Minor Support :
Major Resistance:$2.843, $2.97-$2.99-$3.00, $3.061,$3.192, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461, $4.501

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Heading Into Seasonal Weakness

Daily Continuous

Prices continue to challenge the lows but breakdowns receive support which isn’t allowing a dramatic breakdown to occur. Heading into a period of seasonal weakness, so I would not expect a variance to the current trade patterns.

Major Support: $2.97, $2.916-$2.895, $2.858, $2.808, $2.727, $2.648,
Minor Support :
Major Resistance:$2.97-$2.99-$3.00, $3.061,$3.192, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461, $4.501

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Not Sure if Q3 Low Is In

Weekly Continuous

September plunged through the conventional support zone and closed below both on Tuesday with a significant increase in volume, oddly though the prompt recovered. The extension of the decline to close at $2.808, the lowest daily close since November 14th, below definable support with the highest volume since 07/23 had the earmarks of a decline that would be extended lower– Huh – volume, although still higher than average began to dry up, and the ranges traded during the two days following the new low close were less than a dime. The restricted ranges and the closes near the highs were clear suggestions that the enthusiasm of Tuesday’s sellers had, substantially diminished.

There is still a lot of negative seasonality ahead, including the period bracketing Labor Day that will be the primary focus of the next Week’s, but a weekly reversal (the close for the week was higher than the open after trading a lower low) with increased volume, to hold the trend line feels like a rejection of lower prices. The determining factor will be whether the trend line declining from the June and July highs (currently $2.980) continues to guide prompt gas lower or a will it be violated and trigger a short covering rally to test some of the plentiful resistance between $3.20 and $3.50.

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Must Be a Negative Storage Release

Daily Continuous

Prices tanked on Tuesday and showed no signs of rebounding yesterday. My only guess is that the storage release today must be very bearish with a significant injection but that is fundamental information, I don’t track such things. Perhaps that everyone one is suspecting bearish data, when they get the data, there are no more sellers. We shall see.

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support :
Major Resistance:$3.167, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461, $4.501

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Market Not Expanding Declines from Death Cross

Daily Continuous

Weekly Continuous

Wanted to show on both the Weekly and Daily charts the Death Cross formation (when the short term moving averages break below the long term averages) and responding to a question from one of the readers. While a bearish formation indicating the potential trend change, I chose not to highlight as the market seemed to be focused more on the ranges each contract had developed. Note on the Daily Chart a “cross” occurred last year and after a few days. Perhaps this year is different but I would not add significant short positions until the duration of impact is better defined.

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support :
Major Resistance:$3.167, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461, $4.501

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What’s Coming

Daily Continuous

Declines continue but would hesitate to suggest adding to shorts until the range provided, break down. Look to the Weekly section for expectations for the declines and weekly bias.

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support :
Major Resistance:$3.167, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461, $4.501

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