It was in like a lion and out like a lamb for March’s debut asthe spot month Friday as traders took the contract higher at theopening bell only to deliver it lower throughout the rest of thesession. March finished down 1.7 cents at $2.532.

While some traders were baffled by the price action others rodethe wave by buying on the move up and selling on the move lower.

“After it broke through $2.56 [Friday] morning, you had to ownit,” said Ira Hochman of New York-based Trot Trading Corp. “Thatset up a good buying tail and we spiked from there. But just likepast moves to $2.65 and $2.685, the market wasn’t able to do anyreal work above $2.60. It goes up and then comes right back off.Once it broke back below $2.62, the market was a sell,” he said.

Even though the futures market couldn’t sustain the rally, cashprices did, sending Gulf points up by as much as 15 cents forweekend flow. “We were expecting a nice, quiet, post-expirationFriday, but instead the futures market raced up on the open andcash prices followed its lead.”

Weather, both actual and forecast, also played a key role inFriday’s topsy-turvy trade. While parts of the South were dealingwith freezing temperatures and frozen precipitation, the NationalWeather Service was predicting a thaw for later this week.According to its latest six- to 10-day forecast, the NWS expectsabove-normal temperatures over a large portion of the countryextending from Maine to Arizona. Within that area, Texas can lookfor much-above normal temperatures for the Feb. 3-7 period.

Looking ahead, many traders feel that if the weather doesmoderate significantly, prices will have a hard time holding theircurrent levels. Susannah Hardesty of Indiana-based Energy Researchand Trading views March’s chances of breaking above $2.715 slim andlooks for prices to drop significantly into the middle of themonth.

However, not all are as bearish as Hardesty. While she looks forthe first bottom of the winter low to come in on a move down to$1.90 to $2.10 level, Hochman expects buying in the $2.335 to $2.38area to support prices. “You have to be a seller up and especiallyon the rallies. Until this market proves it can trade above $2.60you have to be short,” he said.

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