Author: Willis Bennett

Rally In the Last 30 Minutes

Daily Continuous

Not sure what happened or hit the news wire but prices caught a major bid, rallying $.25 in 30 minutes at the end of the day yesterday. Range trading around $5.80-$5.90 until a whole bunch of folks decided it was wise to be buying. Still trading in the range discussed — I was surprised to see a rally going into a storage report which is likely to show another injection– perhaps the last of the month due on weather this week. Whatever happens — it is again another mystery.

Major Support: $5.61-$5.44, $4.716, $4.705-$4.68
Minor Support: $5.47
Major Resistance: $6.456, $6.74,$7.00, $7.18, $7.532, $7.71-7.75, 8.021,

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Consolidation Around $6.00 Continues

Daily Continuation

Price action remains trading around the $6.00 area and some would call it a consolidation phase. Yesterday, continued this trading between $5.85 and $6.20 which is a smaller range that recent volatility. Is the consolidation setting up additional declines– down to the lows from previous declines — or is it developing a base from which a Q4 rally can commence and sustain. Have limited knowledge of any fundamental reasons for either of the potential outcomes so there will be no explanation.

Major Support: $5.61-$5.44, $4.716, $4.705-$4.68
Minor Support: $5.47
Major Resistance: $6.456, $6.74,$7.00, $7.18, $7.532, $7.71-7.75, 8.021,

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Both Bias’s in One Day

Daily Continuous

Wrote about which fundamental factor would influence trade yesterday, little did I know both bias’s would have an impact with the morning trade following the near term cold and then as the morning moved along the bears took over and prices declined back below $6.00 before the close. What’s next is not my in my knowledge capacity –prices have not hit the extremes (though the high side was within $.06) of the range but I remain patient.

Major Support: $5.61-$5.44, $4.716, $4.705-$4.68
Minor Support: $5.47
Major Resistance: $6.456, $6.74,$7.00, $7.18, $7.532, $7.71-7.75, 8.021,

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Reversal Week

Weekly Continuous

I have no clue what stimulated the market to the opening gap of that size (last Monday) but it took the prompt through the still rising 200 – day SMA. The run did not last long as December quickly fell to close the gap and continued lower. After back – to – back weekly gains, the first since the final run to the August highs, on Friday a failed recovery attempt, terminated ending up as a downside reversal from just above the previous week’s high to close the reversal lower. The week ending daily reversal left December back below $6 (where most of the trade during it’s tenure as prompt has been spent). Critical support for December is between there and its October and to date November lows ($5.345 –$5.614). Events like this week’s reversal following an opening gap and then the moving average cross along with other factors suggest that rallies in December gas will be enthusiastically sold.

The last time the continuation 10 – week (SMA) crossed through the 40 – week was during January AFTER the construction of the December ’21 low and remember moving averages are always “lagging” indicators. The 10 – week remained there for several weeks until prompt gas kicked off on the late winter/early spring rally.

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Long Range Forecasts vs Near Term

Daily Continuous

I rarely dive into the “fundamentals” associated with natural gas– but due to the quiet range trade (prices declining back into the range either side of $6.00- discussed here for over a week) wanted to take a shot at the quandary that fundamental traders face. Near term the forecasts are for cold temps and higher demand near term (10 days) but then the models have some warming after that period. So how the folks trade this contradiction – not sure– but the range seems a safer way to trade.

Major Support: $5.61-$5.44, $4.716, $4.705-$4.68
Minor Support: $5.47
Major Resistance: $6.456, $6.74,$7.00, $7.18, $7.532, $7.71-7.75, 8.021,

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Large Gap Holds During Trade Day

Daily Continuous

During the trade day the gap from the Sunday opening held well– it wasn’t until the after market (on light trade) that the market corrected but could not close the gap. I know the timing of that decline and the lack of volume during the decline is very important to at least one of you– the attempt was valiant but still unsuccessful. Perhaps the gap closes today but the damage that was done a month ago (when prices declined) was inflicted to the bears yesterday. Would wait to see where the range gets established before entering significant positions. I have fallen to the flu bug over the weekend so not sure that there will be a Daily tomorrow.

Major Support: $5.61-$5.44, $4.716, $4.705-$4.68
Minor Support: $5.47
Major Resistance: $6.456, $6.74,$7.00, $7.18, $7.532, $7.71-7.75, 8.021,

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Wow, Dec Gaps on Sunday Night

Daily Continuous

The chart above was the standard Daily continuous chart that I download on Sat afternoon. Take a look at the same continuous chart after the open on Sunday night below.

Daily Continuous

It is that type of opening that I cautioned against selling the gap last week and covering that short if the market closed above that gap– which happened last week. Now what — would not suggest that this is going straight to the moon and would expect more of a gradual two steps forward — one step back type of price action. For now, play the run on just a daily basis (not holding for an extended period).

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Break Above Gap

Daily Continuous

December gas rallied on somewhat increased volume to close the continuation gap left on 10/17 and then fell to test support. The week ended with strength as prompt gas rallied to a higher high and closed above the previously filled gap, the declining 20 – day SMA and the June/July lows.

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Price Seems to Be Consolidating Either Side of $6.00

Daily Continuous

All this week prices moved either side of $6.00. Monday was a big rally to test resistance and failed — Tuesday a big decline (eliminating the rally) to test mid level support only to fail with the $6.00 number just about in the middle. Guesses are there seems to be some sort of equilibrium, in the traders eyes and positions, to facilitate this behavior. The range has held through weather forecast changes, news about the LNG plant a a bearish storage release. That is a lot of bearish headlines and here we sit in a tightening range. Work the extreme ends.

Major Support: $5.61-$5.44, $4.716, $4.705-$4.68
Minor Support: $5.47
Major Resistance: $6.314, $6.456, $6.74, $7.18, $7.532, $7.71-7.75, 8.021,

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The Effects of Forecasts

Daily Continuation

Heard from some of the fundamental traders yesterday about the one day up — one day down– one day up phenomenon that has ruled trade this week and my suspicions were confirmed that the movement was due to the changes in the coming two week forecasts. Happens frequently in the shoulder seasons for gas and it makes range trading a cautious strategy. I like sticking to the major range and being patient to see if the support and/or resistance areas hold. The other reason for this approach is the stop losses are usually very close. The market was banging up at the gap again yesterday, failing once again– so do we go back and test support? You can make some money in this $.60 range.

Major Support: $5.61-$5.44, $4.716, $4.705-$4.68
Minor Support: $5.47
Major Resistance: $6.314, $6.456, $6.74, $7.18, $7.532, $7.71-7.75, 8.021,

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