If you don’t like the weather, wait a minute. And that’s exactlywhat the natural gas market will be doing this week followingforecasts calling for the coldest weather of the season togradually move south from Canada over the next couple of days. Buttraders weren’t waiting last Friday as they aggressively coveredshorts and initiated fresh longs in bullish anticipation of thefalling mercury. After gapping up at the open, the January spikedhigher Friday to finish at $2.446, a 16.1-cent advance for the day.
According to Brad Nesiba of Omaha-based Strategic WeatherServices, the season’s first true Arctic air mass is on its way.The swath of cold air will invade the Northern Rockies as early asTuesday, spread south through the Plains Wednesday, arriving in thewindy city Thursday night. And while the ridge of high pressurewill keep temperatures in the East above-normal during thattimeframe, Nesiba predicts the cold front will sweep to theNortheast and Mid-Atlantic by next Sunday.
And although confidences diminish somewhat for forecasts greaterthan 10 days, he looks for below- and much-below-normaltemperatures to stick around at least through the 11-15 daytimeframe, which will take us through Christmas Day.
While fundamentals were undoubtedly responsible for the pricemove Friday, traders will often look to technicals to determine thesize of the advance. If the January contract is able to tack onmore gains this week, it will likely face resistance at $2.485 and$2.56, which correspond to key daily highs and lows from the movelower over the past month.
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