With little in the way of fresh fundamental news Thursday,traders were forced to rely on technical factors, which continuedto steer them to the long side of the market. Since plumbing a$4.38 low three days ago, the prompt month has rallied 38 cents toclose at $4.76 yesterday.

A Houston-based trader was impressed, but not entirely surprisedby the market’s ability to rally over the past couple days. Forhim, the clear indication that something was changing came Tuesdaywhen the December contract rebounded off stubborn support in the$4.36-40 area. “Cash prices at the [Henry] Hub had fallen into thelow $4.20s. Storage was expected to be bearish. Weather was benign.Everything pointed to lower prices, and look what happened. That’swhat you call a technical bounce.” Moreover, many sources polled byNGI expected the bounce to occur much sooner following the priceerosion seen over the last three weeks. From $5.87, which wasnotched on Oct. 12, the December contract hemorrhaged almost $1.50over 13 trading sessions, concluding with lows put in on Halloween.It was pretty spooky stuff if you were a bull.

Looking ahead, many traders agree that weather, and nottechnicals, will hold the key to the next price movement. While anotable private forecaster expects cooler weather for the EastCoast in its intermediate-term predictions, the National WeatherService continues to forecast above-normal temperatures for theeastern half of the country. Some traders speculate that priceswill have a difficult time plodding much higher until there is somesort of agreement between private and governmental forecastingagencies.

In daily technicals, December has support first at Thursday’s$4.64 low ahead of the aforementioned $4.36-40 area. On the upside,resistance exists in the $4.85 area, which is the intersection ofthe steeply sloping downtrend line that has pressured prices lowersince Oct. 12.

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