Adding to Monday’s 18-cent price slide the futures marketdribbled lower yesterday as traders factored warming temperaturesinto prices and hunted for sell-stops amid two distinct sellingsurges.

After a spirited sell-off on the open failed to break belowtriple bottom support at $2.48, bulls fought back and weresuccessful in retracing earlier losses. Undeterred by themid-morning buying, bears took over again shortly after 11:00 AM(EST) and demoted prices lower into the closing bell. The Marchcontract was dealt the hardest blow, finishing down 6.7 cents at$2.495.

“Nervously biased higher,” was the viewpoint of New Mexico-basedCynthia Kase heading into trading this week, contingent on winterweather continuing to manifest itself across much of the country.And now that the market has factored in fresh bearish news, shebelieves that it will likely complete the third or “C” thrust of abasic Elliot Wave pattern down to $2.46. The first or “A” wave wasmade on the move from $2.78 to $2.62 and the “B” wave was put in onthe move back up to $2.77.

Ira Hochman of New York-based Trot Trading Corp. uses adifferent technical strategy called Market Profile, butcoincidentally comes to the same conclusion that prices have thepotential to find at least a short-term bottom in the mid-$2.40s.”You had to know [local traders] were going to try and take out[sell] stops below $2.48 [Tuesday] and that’s exactly what theydid. You could see some more residual selling [today] but themarket will likely stir up some buying interest in the mid-$2.40s,”he said. Hochman also points to the significance of the $2.46level, which for him corresponds with 50% Fibonacci retracement ofrecent March highs and lows at $2.78 and $2.14.

Technicals aside, most traders agree that the short-termdirection will hinge on updated weather forecasts. The NationalWeather Service sent shock waves rippling through the market Mondaywhen it said temperatures were going to warm up this weekend acrossmuch of the East and South. The NWS will release a much-anticipatedupdate this afternoon.

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