Category: Weekly Detail

Weekly Continuous

December began the week with a gap higher ($2.748 – $2.769) and extending its rally to test conventional, moving average and mathematical resistance (all around $3.00).

With volume increasing (average daily volume was 180,000 contracts higher) and open interest declining (total open interest fell 57,000+ contracts from last weeks all – time high) suggested the potential for a spirited round of short covering. Unfortunately for the bulls, December failed at that resistance and declined to close Monday’s gap. Trade up to and failure at a nearly identical price in consecutive months suggests a textbook “double top”, not unlike the twin lows of then prompt November at $2.210 on 10/21 and $2.200 on 10/29, and previously before that prompt October at $2.214 on 09/11, $2.229 on 09/12 and $2.223 on 09/19, clearly defining the low end of trade range.

Weekly Continuous

December, which was awarded $.559 premium when November went off the board immediately began to forfeit that premium, reducing it to $.286 by Friday 11/01. December proceeded to gap lower to begin its first full week as prompt. Opening at $2.560 the new prompt traded to $2.514 before reversing higher. The $.281 range traded 11/04 was the widest daily range since a series of them in January (including 01/09 when a range of $.508 led to the to date high of 2024 at $3.392).

Despite the reversal with the highest volume of the week by a considerable margin, December was unable to build on the impressive recovery. Contracting ranges were traded between $2.818 and $2.643 with the low of that four day period traded just before the close on Friday. After trading a series of higher lows during ’21 & ’22 (the last of which was during 10/22) lower lows were traded in March ’23 and March ’24. While not definitive of the beginning of an intermediate/long – term uptrend significant higher lows have been traded during April, July/August and October.

Weekly Continuation

The soon to expire prompt plunged to test and reverse from the 40 – week SMA. The reversal from the long – term trend defining moving average support left November $.068 lower for the two weeks but back above its August and September lows, leaving the charts with the appearance of a failed break-down.

The December contract, still commands $.532 premium over November, traded an outside week reversal. Closing higher each day this week December rallied to test its 50 – day SMA, increased its premium over the expiring prompt and ended above the high traded a week ago with expected increasing volume (due to the roll). That weekly reversal and increased premium are technical positives that are likely to play an important role for calendar November and the remainder of ’24.

Weekly Continuation

Since October 4th December has traded to $3.406, the upper boundary of a trading range constructed on that chart since early July (the August high of December gas was $3.395), and down to $2.975-$3.000 is the lower boundary of its several months range (December set two lows during September, the first on 09/03 at $2.975, the second on 09/19 at $2.976, four times between 09/03 and 09/19 reversed higher from that support. Last week the sponsorship that had previously existed just on either side of $3.000. When that support failed last week, December traded to new contract lows back into the recent range trade.

Weekly Continuation

Prompt November traded quietly most of the week. From what proved to be the week’s low at $2.825 on Tuesday November rallied to $3.000 on Wednesday before reversing to close lower. A new high daily close followed $2.970, the highest daily continuation close since just after the June Q2 high, but with the lowest volume since 09/06. A higher close on lower volume is a form a penalty flag on any further run and not an indication that a flood of buyers is pushing price higher. Another higher high on Friday, to $3.019…squarely into the resistance, expanded the range a bit (through the first four days the total range traded was $.175 vs last week’s 15 – week average of $.281) and extended the rally from the July/August Q3 low to $1.163 (62.7% vs a ten years average of 64.1%) but another reversal followed, and test the low of the week’s range. Can not explain why but November contracts tend to rally during the first week of October.

A year ago after October was off the board November ’23 rallied smartly to a high of $3.471 on 10/09 and had become similarly overbought (the daily RSI reached 84.30 v a high of 81.13 on 09/30/24…on a weekly basis). Over the next ten trading days November ’23 came off from there to $2.861, before rallying to settle at $3.164. In ’21 November reversed from a high (on October 6th), and fell from $6.466 to $4.825 before recovering to go off the board at $6.221.

Weekly Continuous

Well that was different. October rallied to trade the high of its tenure as prompt on the same day it went to settlement, the first expiration month this year to do so (actually, the first month since July ’23). As discussed previously, eight expiring monthly contracts have traded their low during the days of the expiration process. While October faded $.105 from its expiration day high, $2.585 was the highest settlement value since July settled at $2.628 (after falling from the June Q2 high at $3.159), was $.151 higher than last week’s close and $.655 higher than September.

The new prompt November contract was awarded $.168 premium over October settlement (vs $.285 at last week’s close) began by narrowing the “expiration” gap to $.030 ($2.690 – $2.720), but quickly followed through to the upside. On Friday, November extended the rally to trade as high as $2.928 and was bid to a slightly higher high in aftermarket trading ($2.932) much like October was last week. Although Friday’s volume was less than either Wednesday or Thursday, the new prompt traded a technically positive “outside” day reversal higher and closed at the highest price since June 18th (July 8th for the November contract).

Weekly Continuous

For the third consecutive week steadily lower offers for the prompt gas ended with a reversal to the upside creating a higher low each time. Until late last week resistance presented by the upper boundary of a trading range that included the late July and calendar August highs had limited the reversal rallies. On 09/12 a high volume extension left October above that resistance but there was little follow through after the weekly closing violation and the prompt faded to test the continuation 50 – day SMA. The reversal from a successful test of the moving average support left the soon to expire prompt above the almost always important 20 – week SMA for the first time since the close of week ending 07/12, at the highest daily close since July 2nd, the highest weekly close since 06/28.

The technical case has been made that the successful test of the August expiration low coincident with September expiration (both $1.856 for a rare perfect double bottom), was likely the confirmation of a traditional Q3 low. Even so, the declines for the last eight expiring contract months gives me pause for thought. While I am still not convinced that October will hold onto its gains, two weekly closes over increasingly well – defined support…between the continuation 50 – day (currently +/-$2.23) and the late July – August – early September highs (between $2.270 and $2.301), along with the buying that continued through Friday’s close, which was essentially on the high.

Weekly Continuation

Back from the Canadian fishing and am not shocked at all to see what I missed. September fulfilled the expectation of declining into expiration as the eighth straight month to do so, and the fifth of the eight months that have expired in 2024 to trade the lows of their tenure as prompt coincident with expiration. Expiring September traded to the exact same price as expiring August as it went off the board. Both the calendar July and August lows were $1.856…leaving the remaining sliver of the 04/29 expiration gap still open between $1.848 and $1.856. Four weeks ago, when August first left the gap unfilled it was commented that it was clear that some folks were defending that gap and they still are.

A year ago expiring September also traded the August low (anniversary events are always interesting) after trading $.032 through the July low. A reversal from that low produced a bullish momentum divergence. The August low was the Q3 ’23 low and was not violated until 12/11. New prompt October, which was awarded $.167 premium over expired September immediately built on that premium gaining as much as $ .074 before fading to end the week still $.053/dt lower.