The bears were at it again at Nymex on Tuesday, prompting someanalysts to suggest the downtrend that has weighed on the marketfor over 4 months has resumed. The September contract was thehardest hit by the selling pressure, moving down 5.8 cents to$1.983 on the day.

A Gulf Coast trader was pleased with the “neat and tidy” upwardcorrection the market staged on Monday. “We have been waiting forthat spike for a couple of weeks, now it is a little safer to shortthis market.”

A Tulsa-based trader agreed, saying Monday’s spike was just a”knee-jerk reaction” to the large position held by thenon-commercial traders in the Commitment of Traders report (COT)released Friday.

However, Tom Saal of Pioneer Futures in Miami, believes the COTreport taken as of Tuesday August 11, proved only that thenon-commercial/speculators were as short as they could get, and asa result were forced to cover their positions. Now the questionthat needs to be answered is who is going to be a seller in thismarket? The speculators have largely covered their positions. Theyhave little incentive to get back in on the short side and exceptsome possible light rolling of September positions into backmonths, the commercial segment has little reason to push thingslower, he said.

Saal targets support for the prompt month at Tuesday’s low of$1.94 which nearly coincides with existence of a possible “Wbottom” at $1.93. He may have a point. As of 6:00 P.M. ESTSeptember contract was up 3.2 cents to $2.015 in the evening Accesstrading session.

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