Author: Willis Bennett

Same Range

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Spoke earlier this week about the actions I would recommend considering the trading range we are enjoying. Prices are now starting to challenge the resistance levels and is the area where action (discussed earlier) may be promoted.

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support :$3.30-$3.26
Major Resistance:$3.46, $3.628, $3.86, $4.168, $4.461, $4.501,

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Sunday Starting Stronger

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Discuss expectations for prices this week in the Weekly Section, working from the historical standpoint– will just add that the Sunday night trade showed a little strength which may or may not continue through the trade day. Trading for me is selling premium as prices trade to resistance and selling premium if prices trade to test support. Seems simple but in a range market (last few months) it has provided revenue.

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support :$3.30-$3.26
Major Resistance:$3.46, $3.628, $3.86, $4.168, $4.461, $4.501,

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New Month Same Range

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After holding support at the continuation 200 – day when trading resumed after Memorial Day, June tried to rally ($3.511), but could not duplicate the strength into settlement of its two immediate predecessors. June’s last trading day was the opposite of the close of trading for April and May. Expiring June was hammered as it went to settlement, falling from that $3.511 high to $3.152, before settling at $3.204 still $.034 higher than May (which rallied .311 on its last trading day to find that level). Consecutive settlements at +/- the same price level suggests pretty good demand between +/- $3.15 – $3.21…which technical types like myself will call support. Supply, which technical types like to call resistance, has been by the settlement values of March and April, $3.861 – $3.906, hence the range I have been discussing for the last three months.

A week ago, July was bid $.391 premium to soon to expire June, a historically high premium for the mid – summer month. At June settlement that premium was reduced to $.353 but was still the highest in recent years. The last couple of times that a significantly greater premium was awarded to the prompt – in – waiting, the new prompt took off to the upside, it was suggested here that this may not happen. Plus, considering that the low level of open interest, upside vulnerability was may remain a concern.

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Premium Gone

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Discussed earlier in the Weekly Section that the premium afforded to the July contract would be tested after expiration and the price action closed the gap from the expiration range and the July contract in yesterday’s action. The July contract is now in the range from the June contract. Continue the range trade.

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support :
Major Resistance: $3.26-$3.305, $3.46, $3.628, $3.86, $4.168, $4.461, $4.501,

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New Prompt — Gap Enclosed

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You already know what this Daily will be about — That is right the premium afforded to the July contract. Sit back and watch what happens.

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support :
Major Resistance: $3.26-$3.305, $3.46, $3.628, $3.86, $4.168, $4.461, $4.501,

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Prices Remain Quiet

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Not much to add from the Weekly expectations published yesterday. The July contract remains at a significant premium to the expiring June contract that may reduce as the expiration concludes or early in the July prompt period.

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support :
Major Resistance: $3.26-$3.305, $3.46, $3.628, $3.86, $4.168, $4.461, $4.501,

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Two Week Close at Same Level

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Discuss the issue of last week’s close at the exact level of the previous week in the Weekly Sections but needless to say it is a very rare event. Where do we go from here is more critical and all I can see is some brief further weakness into the historical seasonal early June (as prompt) strength post expiration. I am more interested into the premium give the July prompt and how that trades during the week.

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support :
Major Resistance: $3.26-$3.305, $3.46, $3.628, $3.86, $4.168, $4.461, $4.501,

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Definition of Going Nowhere

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I am starting off this week from a comment that an old friend and someone who has tracked natural gas commodity trading since the inception of the contract (Larry Marshall)… “Over the thirty plus years that this observer has watched and commented about weekly fluctuations in the natural gas market the number of times that a prompt has closed unchanged from the price on the previous Friday can be counted with the fingers of one hand…but that’s what happened during the pre – holiday last full week of June’s tenure.” I think my title sums up the gas market this past week.

I opined that the market may pause at the gap left on April 29th, but instead June hardly paused at the gap and the slightly rising 200 – day SMA before trading a new low for its tenure as the prompt contract with the close on Monday nearly at the low ($3.110 v $3.098) with increased volume, clearly appearing to be poised to test its April low. Remarkably, June retraced 50% of the decline from its May high with the highest volume since April 10th before fading to the aforementioned unchanged weekly close.

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Back to the Range

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With the storage release I was wondering if the recent strength would be curtailed and that it was. The heading says it all – back into the range that June has created.

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support :
Major Resistance: $3.26-$3.305, $3.46, $3.628, $3.86, $4.168, $4.461, $4.501,

Solid Bounce

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Prices refused to extend down to the April low of June gas and performed a solid rebound. Not sure this is a rally that should be jumped onto — there is a solid possibility that further gains will be hindered by the storage release coming up. Regardless, the market continues to trade with in the range that June has developed.

Major Support: $3.054-$3.007, $2.97, $2.727, $2.648,
Minor Support :
Major Resistance: $3.26-$3.305, $3.46, $3.628, $3.86, $4.168, $4.461, $4.501,