After posting 7.3 cent rally to kick off the week Monday, thefutures market found itself in a spirited see-saw battle pittingprice-optimistic bulls versus price skeptical bears Tuesday. In theend however, the market sided with the trend as the bulls came awaywith their fifth gain in as many days by nudging the May contract3.2 cents higher to $2.331. The May contract expires today at 3:10EST.

“Locals were very active in the market today,” commented atrader who said they were responsible for the push above $2.30Tuesday. “There was a great deal of apprehension about owning themarket above $2.32. A few big locals were buyers above that leveland in doing so they have become extremely long.” He continued byadding that had it not been for their influence, the market mighthave fallen under its own weight. “There was a vacuum below $2.31.A move back under that level and buying might not have kicked inuntil the mid to upper $2.20s,” he reasoned.

A Houston marketer agreed, and added marketing companies weresomewhat reluctant to buy the market in the $2.30s. “There arepeople who are scared to death of this thing. Some of them sold themarket at $2.25 and have already taken a big hit. What happens ifthey buy it back and then it moves right back down to $2.25?” heasked.

The $2.25-29 level, however, is a possibility, argues anothertrader. “Cash will do its part in trying to keep futures afloat,but in the end, May’s last trading day will be decided by who iswilling to buy the May contract. Utilities might find value inowning it, but prices will have to dip back into the $2.20s forthem to step up as buyers,” he said.

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