The futures market continued higher Friday, but it was notwithout a struggle when morning short-covering was followed by abrief, but spirited, long liquidation early in the afternoon.However, that dip in prices paved the way for another round of”bargain buying” as some fresh longs were seen entering the fray.And just as the case has been almost the entire week, it was bullsthat ended up on top Friday, with April finishing at $1.854, up 1.9cents for the day and 15.5 cents for the week.

Looking at the latest Commitment of Traders report releasedFriday by the Commodity Futures Trading Comission, Tom Saal says wecan gain insight as to who were the winners and losers in the movehigher. Commercial and non-commercial traders were net short 21,157positions as of last Tuesday and since that time the April contracthas moved a dime higher. “Looks like large traders all got on oneside of the boat and then it flipped,” he quipped. And who was thewinner? “The small trader appeared to be on the right side-at leastthis week,” Saal concluded.

But that begs the question as to whether the small trader willstill be on the right side of dealings Monday afternoon when thecurtain is drawn on the April contract. And Saal feels that we canexpect more of what we saw on Friday-waves of long liquidation,interspersed with continued short covering. “Ultimately thesettlement price will be decided based on the level traders arewilling to make or take delivery. At what level are they willing tobe long or short physical gas for the month of April,” Saalreasoned. “We’re looking for April to probably end up on a highernote again Monday.”

A Houston marketer pegs the $1.68-69 level as the price he wouldbe comfortably long for the month, adding that the downsidepotential of this market still makes him very nervous. “On theother side, I think you’d be a fool not to sell $1.90s,” heconcluded.

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