In a frenetic trading session that had even the most seasonedtraders on their toes, gas futures gapped higher on the open onlyto crumble lower in two distinct selling waves yesterday. Incontrast to Wednesday session that saw almost uniform increases,Thursday’s price action for the 12-month strip was inconsistent,with losses in the out months outpacing the 7.7-cent declineregistered in the prompt month. The March contract finished at$6.158.

As evidenced by the choppy trading activity, there was no lackof fresh fundamental news. Weather forecasts released by EarthSatCorporation and Salomon Smith Barney corroborated with bullishgovernmental forecast yesterday in calling for an invasion ofArctic Air to enter first into the western half of the country,eventually migrating to the east by the second half of the month.

Traders were quick to react to these forecasts early yesterdayby taking the March contract to a $6.70 high both in Nymex Accesstrading and also in over the counter dealings on EnronOnline, abroker said. As it turned out, however, that would stand as thehigh point because the market was unable to duplicate the feat oncethe regular open-outcry session opened at 9:30 a.m. (EST) Thursday.Instead, prices tumbled lower as traders alleviated overboughtconditions. In a daily email sent out to clients early Thursday,Tom Saal and Ed Kennedy of Miami-based Pioneer Futures warned ofthe possibility for a sell-off. Only a settle above $7.10 willavert a price slide, they said.

Citing lows notched on Jan. 31 at $5.65 and on Feb. 6 at $5.62,Saal is watching the charts for a potential double bottom formationthat will be confirmed on a settle above $7.10.

On the downside, one local said he believes that as long as themarket holds above yesterday’s low of $6.06 the market couldconsolidate and move higher in the short-term.

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