After notching gains in both the regular and Access tradingsessions Wednesday, the futures market sank again yesterday asbulls battled with an increasingly negative technical picture andunsupportive weather outlooks. Within an hour of its $2.895 open,the December contract had already slipped a nickel lower. From thatpoint it continued to chop lower for the rest of the session,finishing down 4.7 cents at $2.826.

Several traders were surprised by the market’s ability to trendlower following a generally bullish storage report releasedWednesday afternoon. According to the American Gas Association 4Bcf was injected to underground storage facilities last week versusa 48 Bcf build last year. That served to widen the year-on-yearstorage deficit from 55 Bcf to 99 Bcf.

However, for Ira Hochman of New York-based Trot TradingCorporation, the market is trading more on technical factors thanfundamentals right now. “Market was well offered [Thursday]. If itwasn’t for the one large buyer out there this thing would be a lotlower,” he said.

And looking ahead, he fears it may only get worse for marketbulls. A derivation of the Market Profile System, his technicalanalysis looks not at absolute daily highs and lows, but rathertime spent at various levels throughout the day. “That is why youthrow out the $2.895 high today. Its like we never even tradedthere.” And because the market traded below the important $2.88level for virtually the entire session yesterday, he believes the$2.82 level now becomes the key or “fair value” for the Decembercontract. “If we open up below there and get some early selling[Friday] this thing could get ugly,” he said. Support for Decemberexist at $2.74 and $2.70, he advised.

©Copyright 1999 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.