After rallying to new highs earlier last week, futures cameunder some selling pressure on Friday and prices slipped 0.9 cents,ending the week at $3.079. The high for the day was $3.100, a halfa cent less than the day prior and the low was $3.050 a half a centhigher than Thursday’s low. Despite the somewhat negative news, theMay contract failed to provide observers with a significant signalto start the new week.

“To be honest, I think a lot of people were more focused on thestock market today,” said Peter Hattersley of Rafferty TechnicalResearch. “A lot of people saw 10% of their net worth in themarkets go away.” Hattersley noted traders will have to use whatthey already know about this trend or wait until today for freshtechnical news.

“You’ve got that minor resistance at $3.10 and major resistanceat $3.20, and that was kind of the target [we had] for thepotential upside. We’re still using the same trendline [forsupport] at $2.90. That’s a big line but since you made new highs[Thursday] you could really snug it up to about $2.965. Until thatline is broken we’re not going to absolutely try to put a top onit.”

Several observers seemed convinced the rally would end on Fridayin a sudden collapse. “This could end anywhere between $3.10 and$3.20, but I’m not even convinced that it’s going to go any higher.It’s just very perilous,” said one futures analyst. “Thisadditional push up higher doesn’t necessarily mean its not going todrop down as much. It’s just like you are kind of pulling it moretaut to the upside [so it can snap back even harder].”

“I almost wonder if everybody coming out of GasMart/Power 2000[last week in Denver Monday through Wednesday] had a new set offears about deliverability and power concerns for the summer,” theanalyst added. “Why would it have not gone up earlier in the weekwhen the commercials were at GasMart/Power instead of waiting untilThursday when the show was over? All of a sudden the majority ofthe people are back at home and the volume increased and then itwent up.”

She said the first bearish signal probably would be if it fillsin the chart gap created between $3.03 and $3.045 Thursday morning.”This could be an island reversal up here. I think it’s overdue.It’s so precarious. I wouldn’t want to be a trader in this marketunless I really had to be. I think the opportunity to the upsidecould be very quick and sharp, but once this thing breaks down Ican’t see any reason why it won’t break down to somewhere betweenat least the $2.60s and the $2.50s this month.”

The latest National Weather Service six- to 10-day forecastcalls for above normal temperatures over the Midwest and normal toabove normal temperatures across nearly the entire country east ofthe Rockies and most of California and Nevada. Below normaltemperatures are expected over the Rockies, the Pacific Northwestand the Florida Panhandle.

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