Detail the bullish break that occurred last week in the Weekly section, but for the Daily I can only submit that the bullish close and the higher close and the technical damage would support higher prices this week but the initial phase Sunday night has prices lower by $.27– granted on thin trade. The market has declined from just below $2.00 and has rallied 50% in just over a week of trade (8 trading days)– so it is likely there will be an additional consolidation process coming this week. Look for a decline to the area that was resistance around $2.53.
Major Support: $2.00, $1.795-$1.766 Minor Support: $2.53, $2.41- $2.34 Major Resistance$2.836, $3.00, $3.536, 3.595
I have been expecting the bears to make a push against the gains and formulate a decline to support– May have been all wrong and the market is consolidating the gains from expiration this week– potentially setting up additional gains. The storage report was bearish (as expected) compared to the averages and last year– but the market hardly flinched. Going to work the support levels for a consolidation phase going into next week – stops tight as not totally committed to the theory.
Major Support: $2.00, $1.795-$1.766 Minor Support: $2.41- $2.34 Major Resistance$2.836, $3.00, $3.536, 3.595
Not sure that decline to the high side of the expiration process from last month — but it is what it is. Would of preferred a more dominant decline but it is a start. The storage report may provide the required strength to test support levels into the $3.35-$3.45 zone.
Major Support: $2.00, $1.795-$1.766 Minor Support: $2.41- $2.34 Major Resistance$2.836, $3.00, $3.536, 3.595
The second step of the bias change will come with a solid test of support and prices rebounding from the test. Yesterday just provided additional gains with volume expansion into the $2.70’s. Recent runs have provided technical damage to the bear bias of the last few months — but the medium term bias has not be defined — yet.
Major Support: $2.00, $1.795-$1.766 Minor Support: $2.41- $2.34 Major Resistance$2.836, $3.00, $3.536, 3.595
As expected, the bears got a little to far out over their skis and prices bounce off of the sub $2.00 low. Shocking — as the late coming bears (in the March contract) got gutted in the expiration process. Hard to announce that the reversal (as close as it comes to being an outside week reversal) has happened but a series of higher lows in the daily trade will be the confirming piece of information. Events like last week (see Weekly section) are usually the gas markets favorite way of announcing a bias change but it will need to confirm.
Major Support: $2.00, $1.795-$1.766 Minor Support: $2.41- $2.34 Major Resistance $2.61, $2.657, $3.536, 3.595
After trading to $1.967 March rallied into expiration to settle at $2.451 (+$.484). Even with positive closes for its last two trading days, it was the lowest contract expiration since October ’20 settled at $2.101. It doesn’t seem like much, but prompt March rallied to close higher in two of the last three weeks, perhaps a redefining event– more importantly, the deferred contracts rallied a fair amount more than they did two weeks ago. For example, when March ended week ending 02/10 $.121 higher the summer strip was $.099 higher, winter ’23 – ’24 $.020 higher. This week with prompt gas closing $.176 better the summer was $.203 higher, winter $.128. Given the magnitude of the declines in those strips over the last few months, that may not seem like a big deal, but perhaps the gas market is beginning to change.
Following that first print under $2 since prompt gas spent about a week there while constructing the September ’20 low, March reversed higher accompanied by increasing volume (due to the Holiday shortened week I will us the average daily volume did increase modestly) Tuesday – Thursday was greater than the corresponding days the prior week when March was falling. Weekly reversals more likely when they begin from an undercut of a previous weekly low and an extremely oversold condition, have long been the gas market’s preferred method of communicating that the price pendulum had swung too far one way or the other. Often those reversals create momentum divergences because mathematical indicator. In this case the the weekly RSI, didn’t have time to catch up to confirm the lower price low (these divergences have been discussed previously).
Well the Puts are safe and now how far is this expiration run going to take prices. Mentioned over the last week or so about the short covering event that will be coming to the market– we are witnessing the short covering in the March contract — how far does this take remaining contracts is anyone’s guess. Dipping into the summer contracts has started showing some returns.
Major Support: $2.00, $1.795-$1.766 Minor Support: $2.41- $2.34 Major Resistance $2.61, $2.657, $3.536, 3.595
My apologies– I expected the bullish response on options expiration day not the day before– regardless the market for the first time in four weeks, found buyers and fewer sellers, allowing prices to rally on the day. Not surprising behavior based upon all the selling that has been occurring over the last few weeks. Not sure what the March contract does over the next two days — but I am sure I won’t be playing in that pool. I have been dipping into the summer months, now that winter has been defined. Will look at each summer chart and look for good levels to buy, considering the blood letting that has been going on since December.
Major Support: $2.00, $1.795-$1.766 Minor Support: Major Resistance$2.34, $2.61, $2.657, $3.536, 3.595
There may be some excitement coming as the decline’s have taken prices to the $2.00 area which is a very large position in open interest. The break down through the level will take March considerably lower and the puts are forced to cover. Best idea from here is to sit on the sidelines — let this extreme over sold movement conclude as it seems more about the decline in general rather than fundamental input.
Major Support: $2.00, $1.795-$1.766 Minor Support: Major Resistance$2.34, $2.61, $2.657, $3.536, 3.595
Nothing more to be said that when a market breaks support and ends up down for the eighth week of the last nine, closing on the lows — well it just doesn’t get any more bearish for prices the next week. Sure enough, when we opened Sunday and through the light trade day, prices moved lower. Discussed in the Weekly about thoughts on the market forming a base / consolidating, so give it a read. How low does the record oversold market go — no clue but the risk / return on new shorts is declining each day.
Major Support: $2.238-$2.22, $2.00, $1.795-$1.766 Minor Support: Major Resistance$2.34, $2.61, $2.657, $3.536, 3.595
