Very rarely do I utilize a moving average test as a serious test of support– but looking at the chart is very evident that buyers com in as prices test the 50 Day SMA since it broke out above last month. The range discussed now has to evaluate the high side as to where to profit, or hold for further gains.
Major Support:$8.02, $7.55, $7.14, $6.88, $6.754,$6.38, $6.02, $5.623, Minor Support: $7.41, $6.42, $5.548, $5.40-$5.45 Major Resistance: $8.95, $8.996-$9.057
First off– let me apologize for not providing a Weekly yesterday and this on will be brief as I am still trying to overcome a digestive issue that attacked on Sunday.
Consistent with the strength into expiration of almost every month for the last year and a half, expectations were that expiring August would be well – bid before going off the board. Just no one sent my an email that the trade during the past week trade through the June high. Yikes reminds me of the Feb expiration. Needless to say that the activity (primarily an out side month) created some historical technical issues that I will en devour to update on the importance later this week and into the fall.
Mentioned and apologized in the Weekly section about my lack of data interpretation yesterday — rather just trying to keep my head above bored. Yesterday provided a strong test of support below $8.00 in the late Sunday trade only to find some strong footing during the morning. Trade developing a range environment even it is is nearly $.50 or more. Expect more of the same in the coming month to six weeks as prices develop a “base” for the yet to occur Q4 rally. Major Support:$8.02, $7.55, $7.14, $6.88, $6.754,$6.38, $6.02, $5.623, Minor Support: $7.41, $6.42, $5.548, $5.40-$5.45 Major Resistance: $8.95, $8.996-$9.057
Prices started with the September contract weak on the open as prompt. Sourcing the reason for the weakness leads to total confusion. Fact is, price seem to want to test support– whether that takes prices down to $7.75 or lower may be defined in the coming period.
Major Support:$8.02, $7.55, $7.14, $6.88, $6.754,$6.38, $6.02, $5.623, Minor Support: $7.41, $6.42, $5.548, $5.40-$5.45 Major Resistance: $8.95, $8.996-$9.057
No matter how you cut that trade day — it was not well bid. That being said the expiration process was very strong and set a higher calendar high. While August was enjoying all of the glamour, the fall and winter contracts made less enthusiastic moves. Volume is starting to gather some support and open interest is still lagging but perhaps will show signs of life, but are not showing the strength needed to support an additional longer term run.
Major Support:$8.02, $7.55, $7.14, $6.88, $6.754,$6.38, $6.02, $5.623, Minor Support: $7.41, $6.42, $5.548, $5.40-$5.45 Major Resistance: $8.95, $8.996-$9.057
Before I could finish my first cup of coffee prices rocketed up to $9.75 — yea baby that is defining “well bid”. Have no clue what that was about but it was on less than 1,800 contracts in 40 minutes. Rock and roll on — here we sit with the option traders basically gutted and little new fundamental information at hand. We’re running out of gas for August but not in September— need help with that variance.
Major Support:$8.02, $7.55, $7.14, $6.88, $6.754,$6.38, $6.02, $5.623, Minor Support: $7.41, $6.42, $5.548, $5.40-$5.45 Major Resistance: $8.95, $8.996-$9.057
Given the choices I laid our yesterday– guess the wallow around is finished and there doesn’t seem to be any inspiration for liquidation that could send prices lower. Option traders should seriously look at the $9.00 area after the gains yesterday. Prompt now trades at a $.05 premium to December and a $.17 premium to September (don’t ask). I will not be doing anything during the next two days — rather waiting until the kids try to figure out who just bought the last ticket in and starts the panic. Daily volume continues to wither and open interest continues to languish (early estimates).
Major Support:$8.02, $7.55, $7.14, $6.88, $6.754,$6.38, $6.02, $5.623, Minor Support: $7.41, $6.42, $5.548, $5.40-$5.45 Major Resistance: $8.95, $8.996-$9.057
Not sure what to make of these coming three days of the expiration process. Last month, the sky was fall (as well as prompt) going into the weekend and it looked like the 16 month trend was toast — only to rally 12% in the last two days. This month, prices are coming off of two higher weekly closes and seem to be headed to the moon (discussed in the Weekly section). Does the strength and 16 months trend of prices being well-bid into the expiration– do traders liquidate the moves from last week and take profits– or do prices wallow in a tight zone (the most unlikely considering current volatility). Today is like the key day for August gas– last week folks really like Augy but wanted little to do with the fall or winter prices as August to to a premium to December. That relationship continues to hold on Sunday night as August and Dec are at parity and at a $.13 premium to Sept. August could become an independent beast that no has a clue where it trades — but the market itself may not choose to participate.
Major Support:$8.02, $7.55, $7.14, $6.88, $6.754,$6.38, $6.02, $5.623, Minor Support: $7.41, $6.42, $5.548, $5.40-$5.45 Major Resistance: $8.417, $8.95, $8.996-$9.057
After trading to a high of $8.417 last week, prices closed the week at $8.299 for a gain of $1.283 (close to close). Clearly extraordinary gains over the last two weeks and left both the prompt August and September well above the commonly watched moving averages.
Despite this week’s strength, the consensus of technical indicators, failed to confirm the recovery with across the board in a positive (supportive) agreement. Due to the continued weakness in market internals- Open interest continued to decline as the market rallied. This week the total fell another +/- 20,000 contracts to the lowest level of participation since early 2016 – Average daily volume declined an estimated 20,000 contracts during the past week. Volume is currently less than the 50 – day average of contracts that has traded each day of the recovery from the 07/05 low with the exception of one. On 07/12 an “outside” day reversal to the downside was traded with the highest volume of any day during July. With the trading days remaining in calendar July, volume to date is estimated at 4,502,359 contracts while calendar June’s final total of 8,407,189– its is looking like July calendar trading has suffered very large volume losses compared to its predecessor.
A crack developed in this recent bull run, as a bullish (so I am told) storage report released and ran prices up only to find sellers during the remainder of the trade day. Have discussed the perils of the light trade and lack of open interest over the last month and yesterday should send a warning flag to the bulls. When prices rally and don’t hold the gains on bullish news — it may be time to re asses.
Major Support:$7.55, $7.14, $6.88, $6.754,$6.38, $6.02, $5.623, Minor Support: $7.41, $6.42, $5.548, $5.40-$5.45 Major Resistance: $8.02, $8.176
