Pressured by forecasts calling for mild temperatures for the remainder of the year, natural gas futures tumbled precipitously Monday in light, holiday week trading. The January contract, which is set to expire next Monday, experienced the worst of the selling as it dropped 9.4% or 65.8 cents to close at $6.324. At 64,257, estimated volume was light for the session considering the size of the price movement.

The selling came in two distinct surges. Prices were softer in the Sunday night Access trading session, prompting a gap-lower opening print. January futures mostly held their own early Monday, only to be sent spiraling lower near noon as traders digested the meat of the warm-weather outlooks.

According to the latest, six- to 10-day forecast released Monday by the National Weather Service a swath of mild air is predicted to invade a large portion of the eastern half of the country from the edge of the Great Plains clear across to the Appalachian chain of mountains. Unseasonably warm weather is also predicted for much of New England for the same Dec. 28- Jan. 1 timeframe.

However, the winds of change are howling, according to New York-based Weather 2000. “Major cold wave [is] still on target for [the] first week of January for [the] Central and Eastern U.S. After first alluding to this about a week ago, our research over the past several days has reaffirmed that both the most wide-spread and intense period of cold air that we have seen so far this season will arrive next week,” the group wrote in a note Monday afternoon.

The NWS agrees, calling for similarly chilly temperatures in its eight-to-14-day outlook released Monday. Specifically, the NWS predicts an area of below-normal temperatures will descend on a large percentage of the country for the Dec. 30.- Jan 5 timeframe. Only the tips of Florida and Maine, which could see above-normal temperatures, along with the eastern and southern fringes of the country, which could see seasonal readings, will be spared from the below-normal temperatures forecast for the start of the new year.

On the supply side of the price equation, early talk is centered on a net withdrawal of 120-150 Bcf in the latest storage report to be released by the Energy Information Administration Wednesday at noon EST. A number in that range would be bullish, as it would exceed the year-ago and five-year average draws of 95 Bcf and 110 Bcf respectively. And while the market will undoubtedly respond to the news, it will have to do so quickly. Gas trading at Nymex will stop at 1 p.m. EST the next two Wednesdays ahead of the Christmas and New Year’s holidays.

In daily technicals, Craig Coberly of GSC Energy in Atlanta insists that Monday’s sell-off fits neatly into his “up, down, up” Elliot Wave analysis. Specifically, he was looking for a move in February futures Monday below $6.77 to confirm the first “up” phase is complete. With that criteria satisfied, the outlook is for “gas to decline at least to $6.20-50 and possibly lower. [The] $6.20 [level] is the ‘ideal’ calculated objective,” he wrote in a note to clients. February futures closed at $6.388 Monday, down 63.5 cents for the session.

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