Y2K was not an issue yesterday for traders in the natural gaspit at the New York Mercantile Exchange as they seamlessly made theswitch from the December 1999 contract to the January 2000contract. They did, however, have some unfinished business to takecare of. After opening at $2.33, January rumbled 9 cents higher tofill in the chart gap created by December, between the Nov. 19 lowof $2.39 and the Nov. 22 high of $2.35. But before any talk of asustained rally could circulate-bears, armed with fresh forecastscalling for above-normal temperatures-were successful in all butcompletely erasing those early morning gains. At the closing bellthe January contract was up just 2.2 cents to finish at $2.352.

Several traders were quick to point to cash prices for both Nov.and Dec., which made considerable advances Monday, as contributingfactors to the futures’ strength. The largest increases were seenin the Northeast where temperatures were not expected to get muchabove 40 degrees today. But if you don’t like the weather in NewEngland, wait a minute. And that’s what traders did yesterdaybecause just as quickly as cool temperatures brought higher prices,the latest forecasts were pushing them lower.

According to the National Weather Service’s latest six- to10-day forecast, above-normal temperatures are forecast for a hugeU-shaped area, which extends from the Carolinas north through NewEngland, across the Great Lakes, Upper Midwest, Northern Plains toinclude everything west of the Rockies.

And while weather forecasts point to little in the way ofheating demand, the technical picture looks even gloomier. “Themarket shows nothing of a positive nature with which to commenditself, said New Mexico-based Kase and Company. And while the groupdoes not rule out the chance of a rebound, they remain doubtful.”For January and February, next targets lower are in the high$2.20s. However, odds are prices will break down to $2.20 inJanuary and $2.215 in February. For March our targets are a stepmore negative with $2.215 the first target. Odds are 50% or betterfor prices to continue down to challenge December’s low, especiallyfor March, which also shows high odds down to the $2.00 area.”

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