The futures market wasted little time in continuing higherMonday, gapping higher on the open en route to a technicalcorrection that left the September contract up 16.4 cents to settleat $2.041. Sources said Monday’s rally was follow-through buying onthe heels of Friday’s strong close coupled with “nervousspeculators” covering sizeable short positions. Estimated volumeconfirmed the active trading with an estimated 83,239 contractschanging hands.

Now the market looks forward to today’s activity wonderingwhether yesterday’s bounce signals the end of the long-termdowntrend or just a short-term upside correction. A Miami-basedbroker called the prompt month’s ability to move above thepsychological $2.00 level “encouraging for the bulls.” He looks forthe $2.10 level to now serve as the upside objective for the rally.

However, for the market to continue higher it will have todigest another potentially bearish storage injection figurereleased Wednesday afternoon. Early predictions call a refill inthe 70-90 Bcf range which would eclipse last year’s 70 Bcf,increasing the year-on-year storage surplus.

In daily technicals, initial resistance exists at $2.05 followedby the aforementioned $2.10 level. Support now stands at the chartgap created Monday at the $1.88-89 level.

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