Mondays have been bear-traders’ favorite day of the week atNymex with the last five producing losses to start the week. Themarket looked poised to continue that trend yesterday, but strongerprices mixed with concerns the market is nearing the bottombolstered the September contract 2.5 cents for the day. That leftthe prompt month at $1.869.
Tom Saal of Pioneer Futures in Miami feels the market is stillin a very precarious position susceptible to a move in eitherdirection from Monday’s close. He points to the large shortposition held by the non-commercials in the latest commitment oftraders report released Friday as possible incentive for acontinuation lower. “That report was very surprising, showing [fundgroups] net short over 25,000 contracts. What is interesting isthat they sold into those positions while prices remained in arelatively tight price range without a big move lower. I’d look forthe funds to continue selling into this market with the goal ofadding to their positions and their profit.” However, Saal admits,that same open position leaves the market “somewhat vulnerable” toa short-covering rally.
In daily technicals September has support at $1.78-80.Resistance coincides with the downward sloping trendline which, forTuesday’s session, is found in the $1.92 area, a chartist advised.
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