The futures market gave an early “head fake” — pointing lowerat the open — but support held and the market picked up momentumthroughout the trading session Monday. The December contract spikeddramatically higher near the close, registering a 11.2 cent advanceto $2.387. Despite the large trading range, volume was a little onthe light side with only 50,263 contracts changing hands.

Sources were quick to point to a strengthening cash market andrevised weather forecasts calling for cooler-than-expectedtemperatures by the weekend. A Gulf Coast trader said the cashmarket was searching for a comfort zone yesterday. “Prices startedout at weekend levels and ended up near index levels, but there wasa good deal of uncertainty early in the day whether cash priceswould continue down or rebound.”

Tom Saal of Miami-based Pioneer Futures is cautiously bullish inthe short term , and points out that the fundamental reason for theadvance is a more certain this week than last. “This is the secondMonday in a row we have spiked higher on a weather forecast. Lastweek it was a hurricane; this week it is a call for below normaltemperatures. The difference is that the cool weather has a muchbetter chance of becoming a reality than a category 5 hurricane didof making it into the gulf in late October.”

In daily December technicals, prior support at $2.25 has beenstretched but not broken and now lies in the $2.23-25 area toinclude Monday’s open. Resistance is a little more murky. A smallchart gap at $2.435-440 may be only a speed bump ahead of greaterselling at the 40-day moving average of $2.48, a chartist advised.

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