Following two days of nearly unchecked buying last week, bullswere quick out of the chute again yesterday as they bid the Augustcontract higher in early trading. However, the same profit takingwhich capped gains Friday thwarted the buying again yesterday whenprices could not break above the $2.58 level. The August contractspent the rest of the session chopping sideways before eventuallyfinishing up 1.4 cents to $2.542.
With only two days until the August contract expiry, tradersremain divided on the market’s direction in the near-term. Whilesome think it would be crazy to sell this market now that thespeculative fund have obliviously began to reestablish longpositions, others look for a price correction to usher priceslower.
“Right now, utilities are kind of shell-shocked,” a Gulf Coastmarketer noted. “Just last week they were hearing prices in theteens, and now they are seeing offers in the $2.50s. Because thefirst is on a Sunday and the second a Monday, they might hold offon August purchases in the hopes of getting lower prices afterbidweek.”
And according to New Mexico-based Kase and Company a briefcorrection-possibly down to $2.40 for the front months-is likely atleast in the short-term. However, once that down move is completethey favor a move past minor resistance at $2.645 to the $2.75level. In the long-run they maintain that a close above $2.80leaves the market vulnerable to an additional half-dollar ofupside.
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