Author: Willis Bennett

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

Want To See Some Support Tests

Daily Continuous

That is a technical break out (discussed in the Weekly Detail) and now the market needs to confirm the event by testing the old resistance ($2.52-$2.46) as support and launching prices to new highs. These highs may come later after the upcoming holiday period (see Weekly detail) or may take effect prior to the holiday. History tells us that prices have a tendency to rally into the holiday before weakening in early June.

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

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A Breakout For the Bulls

Weekly Continuation

Fourteen of the last sixteen years prompt gas has traded through the calendar April high ($2.529 this year) during May. The remaining two Aprils (’14 and ’19) were “inside” months. Since the prompt trade remained “inside” calendar March’s extremes during April, the April low hasn’t been violated during May since ’06. With technical indicators steadily improving, a reasonable expectation was that June would trade through $2.529, and it did. On Thursday June overcame the declining moving average and conventional resistance to trade through the April high for the fifteenth time in seventeen years doing so with some pretty serious volume.

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

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Break Out to the Upside

Daily Continuous

Prices finally broke out of the recent range and closed above $2.50 for the first time since March. Yes, there was some short covering around $2.50 that propelled the move a dime high. Is this the confirmation of the historical seasonal strength in spring and early summer– not sure but a retest of the “old”resistance ($2.50) and a failure to send prices lower will be a good indicator.

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

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