Many people have been saying August is a difficult futurescontract to trade right now because of a lack of clear cut marketdirection, and the last two trading days have proven those peoplecorrect. After closing unchanged Tuesday, the August contract wasonly able to gain 0.1 cents to settle Wednesday at $2.366. “How amI supposed to make a living in this kind of environment?” a brokerjested.

Actually, August posted a mini-rally late yesterday, and theprice increase continued following the release of the latest AGAstorage report. “[The] 74 Bcf [report] was a little on the low sideof expectations, but it’s not too far off,” the broker said. “Butthis is not an earth shattering report. Even though August is up afew cents in Access trading, I think the last hour of regulartrading showed that there are some locals who are now willing toenter the market. However, the fact that August hasn’t shot up muchhigher shows the market is adequately priced, so I think it will bedifficult for August to break above $2.48, and nearly impossible tomove above $2.52,” he told GPI. August concluded Access trading up3.6 cents to $2.402.

According to the Pegasus Econometrics Group of New York, Augustmay be coming under some pretty significant technical pressure. Inthe 7/8 edition of its Natural Gas Report, the Group noted Augustis currently forming a head-and-shoulders formation, with aneckline at $2.32. “This would imply a break of minor resistance at$2.41 [which indeed happened yesterday] and a move to perhaps the$2.48 level as the right shoulder forms. A break of $2.32 shouldthen lead to a decline to the measured target of $2.12 or below. Ifso, then the failed resistance at $2.25 and support projected byother means for $2.20 and $2.15-165 would have to eventuallyyield,” the Group argued.

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