Like an immovable object the downtrend weighed on the futuresmarket again on Thursday, completely erasing advances made earlierin the week. That left the September contract down 4.2 cents to$1.831, but more importantly the prompt month continues to plodtoward substantive support in the $1.78-81 area, causing tradersto wonder if that level will hold or be merely a speed bump.

“Even a slightly bullish storage report was not enough to propup the market [Thursday],” complained a Chicago trader. That reportreleased Wednesday evening by the AGA showed a net injection of 70Bcf — at the low end of industry expectations.

Even analysts who have called this downtrend from the beginningare surprised by its duration. Susannah Hardesty has extended thetiming for the market to reach its second summer low. If weatherstays relatively benign and hurricanes do not alter the picture,she targets a low in the $1.60-80 area occurring before Sept 11.

However, Hardesty does not rule out a brief upside correctionbased purely on technicals before the market plumbs that level.Looking at historical trends, she found that as a long-termdowntrend begins to run out of steam there is often a pop in pricesbefore the floor is reached. She feels the market could rebound tothe $2.05-19 range in the second or third week of August beforeretracing lower.

©Copyright 1998 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press,Inc.