The futures market gave back a portion of recent gains on Fridayas traders covered fresh long positions ahead of the weekend. TheOctober contract was dealt the largest losses, slipping 8 cents tosettle at $1.878. November, which has been tracking nearly pennyfor penny with October was somewhat immune to the decline, losingonly 4.6 cents to $2.161.

Tom Saal of Miami-based Pioneer Futures characterizes tradingover the last two weeks as constructive for the bulls despite theweak close on Friday. “What this market has been able to do isbounce off a ‘W’ bottom and move higher to take out a previoushigh; however the market was not able to continue higher [Friday]and that gives bears something to talk about.” Furthermore, Saalfeels Thursday’s strength was due in part to a “preemptive strike”by fund traders looking to push October through the 40-day movingaverage in the $1.91-92 area. At that point locals who had the goalof taking out buy-stops in the $1.95-96 area stepped in to bid upthe market, he said.

Looking ahead, a Dallas-based marketer feels prices in both thecash and futures market represent “good sell numbers” right now.”This rally has gotten a little overdone. Barring another storm, Ilook for prices to take the path of least resistance and that isstill down,” she continued.

Looking ahead, Saal feels the AGA weekly storage report willcontinue to be a bullish feature for the market. He drawssimilarities between the shut ins that occurred this month and theones associated with Hurricane Danny in July of last year. “In thethree weeks following Hurricane Danny storage injections in theproducing region were negligible while the market took time toequilibrate. We could be faced with a similar pattern in the weeksto come.”

However, Saal was not convinced that a few bullish storagereports alone would be enough to escort the market higher. “Therewas something for everyone in Friday’s settlement. The bears canpoint to the market trading lower into the weekend, settling nearthe daily low. Bulls, on the other hand, have reason to smilebecause major support at $1.86 held [Friday], and the market isabove [the previous week’s] settle.”

©Copyright 1998 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.