Daily Call

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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Market Committed to +$4.00 For Now

Daily Continuous

Not stating that the market will not decline back under the $4.00 level, but last week, I mentioned that the break above and the several attempts showing strength at and above that level was a key to the bias of the gas market. I am still not willing to commit that the $2.99 printed was the Q1 low but it looking more and more that the market is not interested in visiting those declines. This week’s gains have been on supported by higher volume (through Tuesday) and gains in open interest that suggests that there is more room to move higher. Today, we get storage and it may give us inclinations of gains continuing or a brief correction lower after three solid days of gains.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $4.00, $3.34, $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $4.378-$4.394, $4.461,

Failure At Resistance

Daily Continuous

Prices rocked and rolled up to that key area around $4.46 only to fail after venturing to $4.55, setting a higher high trade. This bullishness should be respected for the future, but considering each rally has failed and given up a significant amount of the day’s gains suggests a lack of total commitment to sending prices higher in the upcoming Q2. Seasonally, Q2 is met with price strength and it sure seems this market wants to run but lacks enthusiasm. More important, does it now give up the total gains and reverts to the range developed in the last week.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $4.00, $3.34, $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $4.201, $4.378-$4.394, $4.461,

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Rhyming With History — Weakness in March

Daily Continuous

Continued the declines on Friday- closing the week on the lows. Not a lot of positive momentum when prices close on the lows of the week (and the week before). This was to expected if you follow the history of natural gas which was discussed here for the last week of so. Question remains though of how far down will the market pursue before finding a base to consolidate around. Go into some of the implication in the Weekly.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.34, $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $4.201, $4.378-$4.394, $4.461,

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Near term Support Fails

Weekly Continuation

The historical consistency of declines following rallies to calendar February highs were discussed over the last week particularly 2014 and 2021 (other years described briefly were ’03, ’05 and ’08) that I did not go into. While there were notable similarities between all but ’08, there were also some substantial differences in the degree of weakness that followed. The two most recent examples are illustrative.

In 2014, March gas traded and reversed from its high on 02/24 (similar to March ’25), but the percentage decline to settlement was a little more than twice that of the recent decline. From the February high at $6.493 prompt gas fell to its “Q1” low on 04/02 at $4.221. An erratic Q2 rally peaked on 06/16 at $4.886, significantly below the average of Q2 rallies. Interrupted by several rallies which all peaked at lower highs prompt gas did not print the 2014 low until the last trading day of the year at $2.882.

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Brief Pause

Daily Continuation

Mentioned yesterday that the potential for a consolidation around $4.00 and that seemed to have happened. Time will tell how the folks figure out the variance between fundamental data or the technical implications. We need to sit on the side and let the participants figure the upcoming bias.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $4.00, $3.34, $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $4.201, $4.378-$4.394, $4.461,

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Expiration Just Below $4.00

Daily Continuous

The now prompt April contract will likely be me with some softness, continuing the recent trade. The potential exception would be the storage report, should there be a surprise. Short of a surprise, I am expecting a consolidation — low volatility market for the next few days.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $4.00, $3.34, $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $4.201, $4.378-$4.394, $4.461,

A Brief(?) Rebound

Daily Continuous

The market rebounded off of the declines from Monday — some of the gains may have been associated with the options expiring — and we will see today. A rhyme with 2014 — will lead to further weakness — testing support. In 2008, (did not discuss in the Weekly) prices held into early July. In 2008, it is the only year (last 25 years) that prices held the February highs over Jan highs. Market seems to defining it’s near term bias.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $4.16-$4.00, $3.34, $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $4.201, $4.378-$4.394, $4.461,

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Expectations of the “Rhyme”

Daily Continuous

Discussed from a historical perspective the few times the Feb trade took out the highs from Jan and made reference to the current month price action looking similar to 2014 and yesterday confirmed the initial interpretation as accurate. The game is not over yet and the rhyming that was discussed, has yet to finish. Yesterday was just the first phase of the correction if it is to be accurately compared to the collapse in 2014. Look at the Weekly chart from the Weekly section and noticed where prices returned to at the completion of the collapse– 2025 has a ways to go yet.

Major Support:,$2.727-$2.784, $2.648, $2.39, $2.35, $2.112,
Minor Support : $3.34, $3.167, $3.00-$2.95, $2.914, $1.856,$1.89-$1.856
Major Resistance: $4.00, $4.201, $4.378-$4.394, $4.461,

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Market Action “Rhymes”

Weekly Continuous

On Tuesday the market further expanded recent range reversal, after a gap lower opening when trading resumed for the holiday shortened week, and Wednesday’s upside follow through took March to test the zone of resistance between the December and January highs ($4.201 – $4.367). My idea was that a test of that resistance would be an “unlikely event”– I was wrong.

On Wednesday prompt gas posted a new high daily close, $4.280 v $4.258 on 01/16…the highest daily close since 12/30/22 (just before then prompt February ’23 gapped lower to begin the New Year). March extended the rally as high as an after market, Globex trade to $4.476 closing a long – standing gap on the monthly charts left at the beginning of ’23, before a reversal lower. The week’s ending close after another daily gain, $4.243…notably within the resistance previously described, was the highest in twenty – six months.

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