Following a week full of downright scary price swings, December natural gas futures seemed to take Friday off ahead of the Halloween weekend. December settled the day up 4.1 cents at $8.725.

Trading within a range of $8.53-8.75 on Friday, the prompt month seemed in no real hurry to pick a direction. Natural gas futures continued to take a lackadasical stance despite a strong surge in crude futures. December crude finished Friday up 84 cents at $51.76/bbl.

Despite all of the wild fluctuations for the week, which saw a 91-cent trading range, December natural gas futures managed to only drop 26.9 cents from Friday to Friday. After dropping 77.6 cents, the November contract expired Wednesday at $7.626.

“After the crazy week we have had, I think we were entitled to a little rest on Friday,” a Washington, DC-based broker said. “We were looking at Fibonacci retracements Friday morning, which we really didn’t get close to on the day.” He noted that a 38% retracement of the move comes in at $8.14, but December futures on Friday were only able to get as low as $8.53. The broker added that trading on Friday was not even able to threaten the Oct. 7 high of $8.42, which looked to be another support point.

“I would hesitate to say that the end of the sell-off is complete,” he said. “Friday appeared to be a little bit of a break, but there did not appear to be that heavy of a volume on it. In the natural gas and petroleum markets, we count this as a corrective wave, not as a new bear move to the downside. I have not been satisfied that the bull move is over yet.”

GSC Energy’s Craig Coberly said the first area of strong support for the correction ranges from $8.28 to $8.46 for the next few days.

“If this support fails, gas is very likely correcting the rally from the September low,” Coberly said Friday morning. “In this event, the corrective process is likely to take a week to 10 days with the next lower good support at $7.93, a 50% retracement of the rally from the September low. This support is followed by the long-term Gann support line that’s at $7.73.

“Longer term, the intermediate term trend still points higher and a move well above $9.45 is expected following the present correction,” he said.

The lack of price movement Friday gave traders an opportunity to mull over the latest open interest data from the Commodity Futures Trading Commission. According to the latest Commitments of Traders Report, non-commercial traders decreased their net long holding from 15,554 to 10,137 positions during the week ending Tuesday, Oct. 26. And while a change of slightly more than 5,000 positions during a week is not a large move by non-commercial trader standards, it is surprising that these speculative accounts would have decreased their longs during a time when the market surged higher.

“Professional speculators sell into a rally?” asked Tom Saal of Commercial Brokerage Corp. in Miami. “And lose money…” According to Saal’s Natural Gas Traders’ Scorecard, the act of selling 5,417 contracts while the futures market increased $1.279 translates into a proxy loss for the funds of $6,928. Meanwhile, the commercial segment of the market, which was on the other side of those transactions and therefore covering their short positions, made a theoretical gain of $7,171, Saal calculated.

Statistically, the non-commercial segment of the market has historically done a great job of buying rallies and selling declines. A graphical representation of this data is located here ( https://intelligencepress.com/data/cot/non_commercial_net_long.emb ). However, the non-commercial trading behavior recently suggests either an inability to guess the market right all of the time, or that the trend is ready to reverse. Check back at https://intelligencepress.com this week for more on this subject.

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