Futures Rebound Easily From Wednesday's Dip
"It was like a bad dream," was one marketer's summation of
Wednesday's 4-cent decline that was quickly recouped by yesterday's
4.1-cent advance. Another trader was a little more specific,
attributing the downward blip to funds rolling positions from May
to June. But regardless of the rationale, Wednesday's lower
settle-the first one in the last seven sessions-looked like the
Grand Canyon nestled among the Alps.
Things got back on track Thursday, as funds and locals continued
to add to their long positions. The May contract finished up 4.1
cents to $2.137 in relatively light trading.
However, a Chicago trader is not convinced May has seen the
last of sub-$2.10 prices and feels there could be some more selling
pressure today. "[May] has flirted with the $2.17 level three times
and not broken through it. I think that the market needs time to
regroup and I look for the market to trend lower [Friday], possibly
testing Wednesday's low of $2.075," he speculated
However in the long term, he remains bullish for both technical
and fundamental reasons. "This market has just completed the
transitional phase from storage withdrawals to injections. That
means the market dynamics have changed and there is strong economic
incentive for people to buy gas for injections while locking in a
winter price." And do not underestimate the power of technical
factors, which he feels have garnered the attention of
non-commercial "fund" buyers. "They are building their long
positions and it's not a wise move to bet against them because they
have more money than God," he half-joked.
A Houston marketer took a slightly different slant. "I look for
early strength relative to cash [Friday], followed by a decay in
the afternoon spurred by light book-squaring ahead of the weekend."
He predicts May will finish in the $2.11-12 area ahead of the
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