Friday was a day of tests at the New York Mercantile Exchange.The market pushed lower on the open to test support at $1.81 onlyto rebound in the hopes of knocking out resistance at $1.875.However, both attempts failed and the September contract was leftto close at $1.833, almost unchanged for the day.

A broker said there was solid strip buying on Friday by peoplethat felt as if the market was a bargain, especially the outmonths, but didn’t necessarily want to own the September contract.”Now the question that needs to be answered before the market moveshigher becomes: Who will step up and buy the prompt month? Thefunds are the obvious candidates to step up their purchases becausethey are the ones who are short right now. However, they can goabout this in one of two ways. They can buy to cover all at onceand in doing so push the market through resistance, taking out buystops along the way or they can slowly ramp up their purchases,allowing the market to move into a sideways trading pattern.” Hefavors the latter and looks for prices to be bounded by the recenttrading range from $1.805 to $1.940.

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