Author: Willis Bennett

Consolidation

Daily Consolidation

No Daily yesterday as there was no change to comments from the day before– wanted to just make the comment today (even though nothing changed) that the market wants to test resistance after a very weak challenge of support. The fact that the challenge was so weak is important to understand that there seems to be an underlying support for prices above $4.00. Time will tell.

Major Support: $3.16-$2.97, $2.727, $2.648,
Minor Support : $4.00, $3.827-$3.801 $3.742
Major Resistance: $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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Testing Low End of Range

Daily Continuous

Mentioned in the postings yesterday that the market would likely develop the range for trade and it seems to be setting the low end. From the short side it may correct to the $3.70 area but would not be aggressive chasing that level. The low extension may provide the opportunity to clear some put positions– other than that — play the levels in the range.

Major Support: $3.16-$2.97, $2.727, $2.648,
Minor Support : $4.00, $3.827-$3.801 $3.742
Major Resistance: $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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Prices Rally to Run Out of Buyers

Daily Continuous

Big run up in the Sunday night market only to find ample selling when the full market opened. Last week’s behavior was informative (discussed in the Weekly section) but did not totally resolve the near term direction (nor the definitive bias component). We now sit in a new range market that will lead us either to consolidation, confirmation (bias), or capitulation (breaking the low end of range).

Major Support: $3.16-$2.97, $2.727, $2.648,
Minor Support : $4.00, $3.827-$3.801 $3.742
Major Resistance: $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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Slight Reversal of Fortune

Weekly Continuous

April gas opened at $4.467 and quickly extended the rally to $4.901 (the highest price paid since 12/28/22) but the sponsorship/volume did not develop to support the higher price and prompt gas reversed lower. After setting a higher high before running out of support, the market quickly reversed and sold off in a quick three day fashion. Unfortunately (for bears) it did not reverse through the previous week’s low, and it lacked a significant volume compared to the previous weeks. Though prices clearly reversed — from a technical standpoint — it can’t be considered a weekly reversal– but it does indicate that the recent strength may be weak in the teeth and further jumps in prices will have significant road blocks between $4.50-$4.90 in the coming months.

The market has been trading in ranges for the last couple of months and perhaps the current market is setting up the new and next range $3.75-$4.90.

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Storage Release Provides Bounce

Daily Continuous

The reversal was relieved momentarily by the storage release but by late in the day had increased the declines. Today will provide the key numbers for the weekly close number and what implications may be for the future. Range is the key for traders.

Major Support: $3.16-$2.97, $2.727, $2.648,
Minor Support : $4.00, $3.827-$3.801 $3.742
Major Resistance: $4.168, $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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Starting To Like a Potential Weekly Reversal

Daily Continuous

Spoke earlier in the week about the market continuing to go up until it runs out of buyers– suggesting that a daily/weekly reversal would start to suggest a lack of buyers. Recently each decline has found buyers but the trade yesterday and Tuesday clearly did not find folks buying the dips. Today is storage and will likely give further indications of the potential further actions.

Major Support: $3.16-$2.97, $2.727, $2.648,
Minor Support : $4.00, $3.827-$3.801 $3.742
Major Resistance: $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

Nothing To Add

Daily Continuous

Hate to be lazy there is nothing to add to yesterday’s Daily except the declines continue.

Major Support: $3.16-$2.97, $2.727, $2.648,
Minor Support : $4.369, $4.212, $4.00, $3.827-$3.801 $3.742
Major Resistance: $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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Somewhat of a Reversal

Daily Continuous

The trade yesterday provided a daily reversal (waiting to see the volume data) from an extraordinary Sunday night late rally. The action created an interesting Candlestick pattern the may become relevant if confirmed in later trade this week. Until those and other elements of yesterday’s extraordinary price action come clearer as the week moves along.

Major Support: $3.16-$2.97, $2.727, $2.648,
Minor Support : $4.369, $4.212, $4.00, $3.827-$3.801 $3.742
Major Resistance: $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

9

Market Defines Its Bias

Daily Continuous

The market doesn’t show its hand much clearer than last week. Starting the week off weak prices rallied, then it provided two more occasions to add to or explore weakness- both of them turned out to be buying opportunities. The old saying of buying the dips in a bull market is successful proved itself evident as each one of the buying opportunities were high volume days and even when the market started to correct, volume went down–low volume days on short corrections is a bullish signal as well. No ideas as to when the buying stops or why but watch the technical indications for some signal. One to consider is a higher high daily (or weekly) reversal.

Major Support: $3.16-$2.97, $2.727, $2.648,
Minor Support : $4.369, $4.212, $4.00, $3.827-$3.801 $3.742
Major Resistance: $4.461, $4.501, $4.551, $4.746-$4.75, $5.031

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Bias Change

Weekly Continuous

Mentioned a few weeks ago to respect the run and constant tests above the $4.00– perhaps the market was changing its bias. All of that respect was under the assumption that prices were going to make a strong test of support at $3.16 and possibly below. Those thoughts left the building with the second largest gain this year…second only to the $.634 gain for week ending 01/10. The “outside” day reversal higher (with the most volume since the day before the February high) was followed by an extension of the rally through that February high for only the seventh time in the last twenty years, but the third time in the last four. April traded to the highest price since 12/30/22 and to a new high weekly close $4.399.

Been discussing the expectation and the divergences looking for the seasonal decline (Q1 low) which is clearly unlikely at this pace. You have to count the two plus weeks decline from the January high ($4.369 – $2.990) that just held the December low ($2.975) as the Q1 low the gas market has traded the Q1 low in January several times in history (in ’21 & ’22 the season low was traded during late December. The last time there was an actual January Q1 low was in ’13). Notwithstanding the dramatically increased likelihood that the “winter” low is in place, divergences, non – confirmations by purely mathematical indicators, are evidence of an underlying weak technical market structure. That which does not mean the market can’t move higher and eventually “cure” those divergences. While not foreclosing that possibility…it is my experience that cure is exceptionally rare without a significant correction in terms of price and time (a correction that lasts two weeks does not meet my expectations.

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