Last week showed some resilience as a higher high and higher lows printed. Go into some of the technical analysis in the Weekly area but suffice to say higher highs and higher lows are supportive to a positive trend movement. The next week or so will provide more information to digest. This can be indicative of a trend bias change –stay tuned.
Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605 Minor Support : $1.856,$1.89-$1.856 Major Resistance:$2.18, $2.25-$2.310, $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16
Twice last week prompt gas traded reversals to the upside when it appeared that post – Labor Day seasonal pressure was beginning to weigh on October, both times from a higher low ($2.075 on 9/3 and $2.117 on 9/5, prompting a couple of thoughts: 1) that seasonal pressure had been exhausted as expiring September fell to test and hold the calendar July low, and/or 2) that weakness was being aggressively bought. On Tuesday, after retreating from last Friday’s test of the August high, October reversed again, trading another “outside” day reversal from another higher low ($2.125 on 09/10). With volume increasing October traded through the August high and closed above it. After extending the rally to $2.407, the highest trade in more than two months, October reversed lower with the lowest volume of the week but still managed to close above the August high.
A weekly close above the August high, the upper boundary of the trading range constructed since mid – July (resistance that limited rally attempts since then), becomes technical support, and goes a long way toward confirming that the twin calendar month lows traded at $1.856, was the traditional Q3 low.
While the gain for prompt gas appears to have resolved the continuation range to the upside, October was the only contract to post a positive close for the week. November, which failed almost exactly at its declining 50 – day SMA, finished just south of unchanged (-$.008) and the remaining months of the winter strip lost an average of $.074. The failure of deferred contracts to confirm strength in the nearby is possibly more characteristic of short covering (note that total open interest declined 21,500+ contracts). We will see if the rise in prompt and the decline in deferred contracts is indicative of unwinding previous positions.
The close above continuation resistance is a technical positive, but October’s failure to close above the almost always important 20 – week SMA (currently $2.353 and slowly rising) and the reversal from an approach to the upper boundary of a very well defined range on its own chart suggest that the burden of proof remains with the bulls. It is not suggested that end users chase the rally.
Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605 Minor Support : $1.856,$1.89-$1.856 Major Resistance:$2.18, $2.25-$2.310, $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16
Didn’t see that coming this week- spoke about the YoYo in the market behavior but the string was snapped and price closed above the intermediate term resistance. Looking at the chart above, notice there was a similar breakout in both July and August only to give the gains immediately. Is this one different — tomorrow and Monday trade will define. Would not load up long quite yet but as the Weekly suggested the bias may be changing.
Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605 Minor Support : $2.18, $2.26, $1.89-$1.856 Major Resistance:$2.310, $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16
Watching this market is like playing with a YO-YO up and down limited to the length of the string– in this case it is the price range. Up to the resistance fail then down to the support. Not much to look for until the storage report.
Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605 Minor Support : $1.856,$1.89-$1.856 Major Resistance:$2.18, $2.25-$2.310, $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16
As suggested prices declined to the middle of the range yesterday– kinda boring unless you selling premium with puts to the downside. Only other way to trade this market is picking support or resistance for a dime gain.
Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605 Minor Support : $1.856,$1.89-$1.856 Major Resistance:$2.18, $2.25-$2.310, $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16
Go into the changes starting to develop in the market in the Weekly but for the Daily trade I would suggest to continue trading the range that has developed in the October chart and the Continuous. The range was expanded slightly on the high side last week but continues to hold on declines.
Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605 Minor Support : $1.856,$1.89-$1.856 Major Resistance:$2.18, $2.25-$2.310, $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16
Twice during the holiday shortened week expected post – Labor Day seasonal pressure appeared to begin to weigh on the prompt, both times (Tuesday and Thursday) October traded an “outside” day reversal higher with increasing volume. This suggests that weakness was being aggressively bought. Before the end of the trading week October was testing the calendar August high ($2.301). That high along with a late July high ($2.270) defined the upper boundary of a daily trading range that has confined successive prompts since mid – July and testing its own 50 – day SMA (currently $2.298 and falling). The close was $.148 above October’s pre – holiday close and less that $.02 below the week’s high the highest weekly close since 07/12 (the fifth of eight down weeks following the June Q2).
As previously discussed, prompt gas has traditionally felt seasonal pressure following the holiday but there is no special magic about the next few days after Labor Day. While sellers are usually in control, price strength has occasionally suggested that the late summer price negative seasonal tendency has already been satisfied.
With that said, while they are not all that common there have been a few years when prompt gas rallied through Labor Day only to trade a mid – month high and then forfeit those “counter seasonal” gains. ’19 and ’21 are the most recent examples. In the former prompt October rallied hard after trading through the August high…peaked at 2.700 on 9/17 then declined through expiration. In ’21 the rally high was on 09/15 at 5.650. Over the next five days the prompt gave up nearly a dollar before finding support.
Mentioned for the last few weeks three challenges for the gas market have been discussed. One of those challenges is unique to the downtrend from the January high and the construction of both the Q1/Q2 and Q3 trading ranges; the other two are long – term historically consistent seasonal’s. Two of the three have been satisfied with the average/above average declines from the Q2 high and then from a mid/late August high. The leaves only the tendency of expiring contracts to decline as their tenures as prompt near an end. As written here multiple times, failure of an expiring contract to be “amply offered” into expiration will be an indication that the character of the gas market is changing/has changed and will be a strong signal that higher prices are on the way. IF the traditional rally toward a Q4/Q1 high began with September’s expiration decline to test the July low, October will pass that test. Keep that thought in the back of your mind over the coming weeks.
The consensus of technical indicators improved a little last week and built on that improvement during the previous week. Support from improving market internals (volume and open interest), daily and weekly closes over several moving averages along with the daily closing momentum divergence mentioned last week (the daily RSI, a VERY sensitive “leading” indicator that never confirmed the July expiration lower low) left the consensus neutral for the first time since indicator deterioration began before the early June Q2 high .
Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605 Minor Support : $1.856,$1.89-$1.856 Major Resistance:$2.18, $2.25-$2.310, $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16
The price action reversed to a more bullish bias after the storage data release. Guess they didn’t inject as much as thought. The question now is does the market continue to probe higher levels or retreat back to the comfortable range. Today will likely tell us as the close yesterday left us at the 200 day SMA.
Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605 Minor Support : $1.856,$1.89-$1.856 Major Resistance:$2.18, $2.25-$2.310, $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16
The rally terminated at the 200 day SMA ($2.26) yesterday — now does the market want to test the support areas around $2.07-$2.05. Would expect the retest of support.
Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605 Minor Support : $1.856,$1.89-$1.856 Major Resistance:$2.18, $2.25-$2.310, $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16
Prices rices bounced from a test of support — but are now heading into serious initial resistance areas so be patient for the trade. The past couple of weeks have started strong only to wither during the week. Let the market define its upcoming directional bias before reacting in a strong way.
Major Support:, $2.112, $2.026-2.00, $1.991, $1.93 ,$1.642, $1.605 Minor Support : $1.856,$1.89-$1.856 Major Resistance:$2.18, $2.25-$2.310, $2.39, $2.44-$$2.502, $2.618, $3.00, $3.16
